The Insourcing Trend: What is the Impact of Clothing Made in the USA?

North Carolina garment factory

Several large companies are bringing clothing production back to the USA, lowering unemployment rates and increasing our competitive ability. But at what cost?

Over the last year, several U.S. based companies have announced that they are bringing production back to American soil. These companies include Apple, Caterpillar, Ford Motor, General Electric and Whirlpool. Among apparel manufacturers, the likes of Karen Kane, hoodie producer American Giant, Keen Footwear, Brooks Brothers, Abercrombie, Opening Ceremony, Levi’s and even Walmart are ‘inshoring’ production to meet the ‘Made in USA’ apparel standard.

In the 1940s this country made 40 percent of the planet’s goods, but since then our manufacturing activity has shrunk to a minute 18 percent. The reason, although not one to be proud of, is the simple fact that labor and other resources became exponentially cheaper in other nations and were more “available” for use. Our material culture has become increasingly dependent on the manipulation of these resources no matter what the cost, mostly due to perceived obsolescence. While a most lucrative business for some of our nation’s richest has become the full exploitation of other countries’ resources and people, too many citizens of this nation wallow in the depressed towns that have been bereaved of the once heavily invested domestic industries. So why have these large companies decided to bring back manufacturing now?

Four main reasons:

1. Labor, transportation, and industrial-land costs are rising in China, one of our largest import countries. Wages are rising at a rate of 15 to 20 percent per year, while wages are stagnant in the U.S.

2. Local manufacturing allows for lower transportation costs and shorter turn-around times, allowing companies to respond to changing consumer demands much quicker. It also allows companies to produce smaller runs of items, cutting back on over-production, as well as increasing efficiency and thus lowering costs.

3. The USA is experiencing an energy boom – unfortunately it is in the name of natural gas. Thanks to hydraulic fracturing, or fracking, North America produces more natural gas than any other continent, and is projected to become the world’s largest petroleum and natural gas exporter by 2020.

4. The move is a very political one, and especially tied to the recent elections and insourcing campaigns to decrease unemployment rates and serve a population that is placing more value on U.S. manufactured items.

When Ralph Lauren manufactured the 2012 U.S. Olympic uniforms in China, the label receiving endless amounts of criticism. Since that faux pas, it seems that more attention has been put on apparel manufactured in the U.S. Although domestic apparel manufacturing is still 40 percent more expensive than in China, the factors mentioned above are contributing to a shift, with orders rising by 30 percent from 2010 for several homeland factories. Demand may also have some effect on the shift, as a study from the American Research Group shows that in 2012, 75 percent of Americans were willing to pay more for U.S. made goods, up from the 50 percent in 2010. Consumers, especially in the late twenties/early thirties age bracket, are turning to U.S. made clothing, causing the trend to have taken off for those with an interest in fashion and a disposable income.

Outsourcing of apparel manufacturing was at its peak in 2010, when China made 40 percent of the clothing bought in the U.S. Since then, labor costs in China have been growing rapidly, but so has (rather ironically) Chinese consumer interest in U.S. made clothing. Manufacturing technologies that have not been previously available in the U.S. are also being implemented in our factories, such as the superwashing of wool. French textile processor Chargeurs opened a superwashing facility in South Carolina in the late 2000’s, surprisingly at the behest of the U.S. military. It seems that synthetics weren’t the choice material for soldiers, as their plastic qualities would cause the materials to melt onto their skin from the heat of explosives. In fact, the Kissell Amendment of 2009 requires all military apparel to be made in the USA.

But what about the labor force here? Are there really enough educated and skilled workers to put a highly functioning apparel production industry in place? Currently, no. Young people with the opportunity have sought careers in more lucrative industries, and our education systems do not cater to skilled craft instruction. This can hopefully shift, and will bring with it an appreciation for the crafts among younger generations.

Although production is moving back to the USA, increasing employment opportunities, injecting the economy with more value and creating infrastructure for a country that is seemingly beginning to come apart at the seams, what does all of this mean in terms of the environment?  As mentioned before, a large factor in homeland production is the local availability of  domestic fuel, but one that will give energy guzzling industries such as chemical producers and steelmakers the perfect ‘patriotic’ excuse to produce and pollute more. Fracking involves pumping pressurized fluids through rock formations that are a mile or more under the ground, to extract oil and gas. These rock formations are often surrounded by pure, clean groundwater aquifers that can become badly contaminated with the heavy metals and toxic chemicals used in the process, as well as with the oil and gas itself.  As “the Saudi Arabia of natural gas”, like Nancy Lazer, co-head of New York-based International Strategy & Investment declares, the U.S. will no doubt see be a plethora of investors ready to drive this potentially polluting cause of fracking under blind pretenses such as job creation, economic stability and global energy dominance. It would seem this current petroleum energy investment, production and dependency cycle is one “made in the USA” equation we could do without.

Yet, energy obtained via fracking is in fact a choice many manufacturers are leaning toward, especially in the energy-dependent apparel industry. But what happened to the creation of jobs through green energy investments? Why don’t our nations top researchers embark on studies for the viability of nationwide green energy schemes that can be utilized by cities and industries alike? Why aren’t we more aware of the implications of a Made in the USA? Most importantly, why can’t so many of these large manufacturers, our government and the people of this nation work together to bring honest, responsibly functioning, environmentally sound and highly efficient production systems into existence?

Made in the USA is definitely a direction we should be heading in, but not at a great cost to the environment or the long-term stability of domestic industries. Isn’t now the time to demand and input systems and methods that will work realistically to create a different view of true homeland security in an environmentally and culturally egalitarian country?

Check in next week to hear more about clothing labels that are realizing this and carrying it out.

Image: USDAgov

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