Made in the _________. Why the U.S. is Rarely the Answer
After purchasing a new outfit, ripping the tags off, and hanging it in your closet, you plan for the day you will wear it (if you haven’t already put it on before hanging it up). The day comes and you put on your new outfit. It looks great, but something on the inside of the garment is itchy and rubbing against your side. The care label. To the average person, it is an insignificant, irritating piece of paper that you likely cut off and hope you don’t create a hole in your clothes in the process. In reality, this care label is a legal document in the United States sewn to the inside of your clothing. It holds the manufacturer and brand accountable for the garment; it must include an RN number (Registered Identification Number which is a manufacturer or dealer identifying code), fiber content, care instructions (wash, dry, dry clean, iron, bleach), international care instruction symbols, and country of origin [1]. Made in China, made in Vietnam, made in Mexico, made in Italy, and the list goes on. In the 1960s, 95% of U.S. clothing was made in the U.S., while only around 2% is made in the U.S. as of 2013 [2]. The main reason for this is the cost of materials and labor.
The U.S. has stricter regulations with the Federal Trade Commission (“FTC”) requiring safe working environments, fair wages, and more expensive materials. Overseas, they do not have these regulations, allowing companies and manufacturing plants to take advantage. This leads to cheaper prices of clothing for consumers to buy since companies are paying workers less money and getting cheaper raw materials (fabric, thread, hardware, etc.). The supply chain is also going to be closer if it is all purchased in the same country or region, which will lead to cheaper traveling of raw materials to factory plants. Private label brands will choose oversea production as making brand labels and customized products is cheaper [3]. In addition, overseas companies are not investing in maintaining a safe environment for workers since it is not required. This also saves them money, similar to cheap labor. Labor in the U.S. is around $25/hour (on the cheaper end), while Vietnam workers’ wages are around $2.50/hour! To put this into context, a pair of jeans made overseas sells to consumers for around $130; similar jeans made in the U.S. are sold for more than double that amount at around $350 [4]! The reason lies with the costs; in order to make a desired profit, the goods have to be marked up a certain percentage (i.e. 50% or 60% depending on the industry). The more money that goes into making the garment, the more companies will mark it up to gain a worthy profit.
I personally did some investigating into the pricing of manufacturing apparel in the U.S. versus overseas and was surprised out how non-transparent the process was! In order to even start talking to a manufacturer, you must fill out a form to set up an appointment to speak over the phone OR you get a general email sent with a quick glimpse into costs and materials needed. I understand why manufacturers do this: so they don’t get their time wasted by people who aren’t actually looking to utilize their services, but even after a contract is signed, some manufacturers still withhold information from clients. In wanting to start my own business, I personally do not find manufacturing pricing affordable and would rather do in-house work. U.S. manufacturers generally offer packages to make pricing easier. One manufacturer in California has 4 different packages with the first being Test Drive that offers two styles for $5,400. The second is Capsule and has five styles for $11, 025, the third is Basics with ten styles for $22, 050, and the final package is Collection with fifteen styles at $33,075. Each package includes project management, patternmaking, technical design, samples, fit test, one round of pattern adjusting, two duplicates per style, and final production ready pattern pieces. This does NOT include the actual making of the garments. It is all developmental pre-production services. Bulk production, or the actual making of the garments, with a minimum order quantity (“MOQ”) of 50 includes all sizing and two different colorways, at most. With bulk production, you must have patterns ready to use. If you need a pattern piece made, you must utilize one of the package options prior to production. Production pricing for a top is around $30/piece to $80/piece with the 50 MOQ requirement. If you would like smaller minimums, pricing increases to around $175/piece. None of the previous listed pricing includes sourcing materials, dyeing fabric, etc. As for production overseas, companies required additional information about the brand to provide pricing details. On average, companies in China require a first production purchase of at least $10,000. If the patterns are not ready and the design is still in progress, costs change. Research can range from $3,000 to $10,000, design is around $5,000 to $50,000, and sourcing/production prices vary depending on complexity [5]. There has actually been a lot of research into China manufacturing versus U.S. manufacturing that has found the costs to be similar. China, with an increased demand in overseas manufacturing, has actually began increasing its pricing for its services. This isn’t solely the case for apparel manufacturing; it dips into technology, household items, furniture, cars, and so much more. One study found that China’s wages in manufacturing labor have increased by 187%, with employees getting around $27/day [3]. This has led to countries like Indonesia, India, Mexico, Thailand, etc. becoming the lowest pricing for production overseas. These pricing figures do differ depending on the industry you are in. “As for the cost of manufacturing in the U.S. VS China, the difference is just 5%,” for some industries [3].
Pricing, like those listed above, force small businesses to keep everything in-house to stay afloat in the industry. The idea of connecting with a manufacturer in the U.S. seems great. We are supporting local business, paying for fair labor, providing workers with a safe environment, and we have the opportunity to walk into the plant and see the process unfold. Communication is also easier as the manufacturing managers are in the same time zone and all conversations are not done remotely. Intellectual property rights won’t be at high risk either [6]. In addition, we would be creating more jobs in America by manufacturing domestically, right? In 2018, 71% of recently employed workers in the manufacturing industry in the U.S. did not have the technical skills needed to work in the field. Most could not even pass a drug test. Many workers in this industry are over 50 years old and will eventually leave their jobs to retire, also leaving the industry with an unskilled workforce [6]. There is not a lack of jobs in the U.S., but more a lack of skilled workers. This exists for two main reasons. First, younger generations no longer want to work these kinds of jobs and, instead, go to college to be placed in a better paying job. With this in mind, parents are also the ones pushing their students to continue their education to have more than they did at that age. They want better for their kids [6]. See Netflix’s documentary Operation Varsity Blues: The College Admission Scandal. The second reason dives deeper into our education system, or lack of one. Excuse me for the side tangent we are about to go on. When our parents and older siblings were growing up, they were taking classes in high school like Home Economics, Wood Shop, Automotive Technology (building a car), etc. I never was even given the chance to take such classes; it simply was not offered. Don’t worry though, we were all forced into computer class, learning how to type as fast as possible like machines. In a world full of technology, the millennial and gen z workforce lack the basic knowledge past generations knew with the blink of an eye. My dad doesn’t need a calculator and can be thrown any number to add, subtract, multiply, or divide. If you were to ask an average millennial the same question, they would leap for their iPhone like it’s a life jacket on the Titanic! Yes, our generation of millennials and gen zers know a lot more about technology, on average, than older generations. We are the generation of technology. So, with respect to unskilled workers, our generations no longer learn the basic skills. If given the opportunity, we want more than a low-paying job; we want a career. This leads to less choices of manufacturing domestically since there are less skilled workers available in the U.S.
Unfortunately, the high costs of production domestically limit the market for potential brands to work with U.S. manufacturers. Small businesses must have huge investors to be able to even think about connecting with such manufacturers domestically. So, how do we fix this? I honestly don’t have a clue. Cheaper costs equate to unfair labor costs or poor-quality garments. How can we get the best of both worlds? The cost of living in the U.S. is so high that we must pay workers higher prices, but overseas cost of living is cheaper, leading to cheaper labor like China’s $27/day. It must be noted that there needs to be a clear acknowledgement that there exists a difference between paying for cheap labor due to lower cost of living and paying cheap labor because you can get away with it. If we could work with overseas companies and hold them accountable to provide fair labor and safe environments, would that be enough? Could we ever manufacture in the U.S. without losing our business in the process?
Possibly. Manufacturing domestically could cut costs in shipping, duties, and quality concerns [6]. As a small business, say we decide to take the plunge and manufacture our garments in the U.S. We pay a higher price, have larger MOQs, do pre-production in-house, and source the materials ourselves. Sourcing. One of the most stressful parts of production. Let’s say we are making a geometric blouse with an 8-button front closure for women. What kind of fabric/fiber content do we want? Poplin, Charmeuse, top-weight Denim, Gauze, Seersucker, and the list goes on. For the geometric design, do we want it printed on or woven in/yarn dyed? Let’s go with printed on since it could be a bit cheaper, depending on the print method we use: digital print, screen print, roller screen print, heat transfer, etc. We choose the screen-printing method. Now, we must find the fabric, print shop, care labels, hang tags, brand labels, thread (if a specific color or if included in production), and buttons. We find all pieces at U.S. based companies except for the buttons. When researching and sourcing, we come across a unique, compass-inspired set of buttons from Mexico. They come at a cheap price, but we want our products to have a care label saying, “Made in the U.S.A.” Interestingly, the requirements to have a company’s labels say “Made in the U.S.A.” are quite vague. According to FTC guidelines, “For a product to be called Made in the USA, or claimed to be of domestic origin without qualifications or limits on the claim, the product must be “all or virtually all” made in the U.S. The term “United States,” as referred to in the Enforcement Policy Statement includes the 50 states, the District of Columbia, and the U.S. territories and possessions,” [7]. The FTC goes on to explain the difference by using an example of all main parts of a grill being put together in the U.S. except for the tubing and knobs. These pieces are imported from a different country. The grill can be labeled made in the U.S.A. since majority of the components are from the U.S. In some instances, the design may be done in one country and the assembly in another. If this is the case, the product would use a qualified claim where a label states it was designed in the U.S. and assembled in Vietnam [7]. How many of our items are truly made in the U.S.A? Does it matter? Given how arduous this process can be, would any design team really want to manufacture in the U.S. when given the option of utilizing production overseas in Vietnam where fair labor can become a top priority?
I have laid out a number of issues in the manufacturing process in both the United States and abroad. In terms of solutions, my proposal is this: perhaps manufacturing shouldn't be such a convoluted process; instead, manufacturers should be working with designers to promote an industry that meets the needs of consumers and creative directors, wherever that may be. As a small business, start-up company, or member of a top design team, where would you choose to fill in the blank?
REFERENCES
[2] https://www.kqed.org/lowdown/7939/madeinamerica
[3] https://sellernexus.com/manufacturing-cost-china
[4] https://www.businessinsider.com/how-much-products-would-cost-if-made-in-us-2016-11#jeans-2
[7] https://www.qualitylogoproducts.com/promo-university/made-in-usa-products.htm