Most of our clothes are made overseas for financial reasons. That is, manufacturing in the United States is more expensive than outsourcing manufacturing to developing countries.
But that’s a vast oversimplification of the complexities that make it (practically) impossible to manufacture clothes in the US without a fundamental shift in the clothing industry. And, for that matter, a fundamental shift in our expectations and consumers.
One reason why clothing is manufactured in developing countries is that labor costs are lower than manufacturing domestically.
For example, let’s say you’re a garment manufacturer that makes $20 t-shirts and sells them for $100 apiece; at most outlets, this would be considered a good markup. If it costs you $15 to make each shirt, you can pocket about 25% of the retail price.
But what if your production cost went down 60%? Suddenly instead of making a 25% profit on each shirt sold, you’d be making 87%. This means the company could afford to produce more shirts with less capital – or put another way: they’ll have fewer outlay expenses and therefore more money left over after manufacturing expenses.
China is the world’s top garment manufacturing country. It is estimated that around 60% of all clothing manufactured in the world is made in China, followed by India and Turkey.
India is the second-largest apparel exporter in the world, trailing only China. It’s not surprising why: manufacturing costs are low and labor laws are lenient – minimum wage for garment workers in India was $68 a month until December 2018 when it doubled to $128.
Most clothing produced is exported overseas where there’s more demand and higher prices because they’re manufactured with lower labor costs than competitive countries like Mexico (which has similar wages but still much higher production prices).
In general, textile companies use these labor markets abroad as their main source of income since wages aren’t too high locally.
However, the European Union as a whole has substantially higher total textile exports than India. Indeed, not all clothes are manufactured in poorer countries.
And there is a small but undeniable trend of reducing overseas manufacturing and striving toward a more sustainable future for the fashion industry.
There are a few reasons why most clothes are made in China.
First, the country has a large pool of cheap labor. The average manufacturing worker in China earned around $1000 per month in 2020, while their counterparts in more developed countries earn upwards of $2000 per month.
Second, China is an expert at apparel manufacturing and has been for many years. The country is home to some of the world’s largest and most efficient garment factories, which have honed their skills over time and can churn out clothing quickly and cheaply.
Third, transportation and logistics networks in China are well-developed, making it easy to move goods around the country – and indeed, around the world – quickly and cheaply. This infrastructure allows companies to keep costs low and maintain manufacturing quality standards.
Certainly not. In fact, the United States accounts for about 11% of the world’s textile exports.
If a company is determined to manufacture ethically and locally in the US, it can find a way. The deciding factor is whether or not that company will value lower wages in developing countries or promote long-term sustainability over short-term profit.
It’s disheartening to think that over 750,000 apparel manufacturing jobs were offshored between 1990 and 2011 in the US. It’s not an easy task to bring that labor back, but it isn’t impossible.
It’s more expensive to manufacture clothes in the United States than in many other countries around the world. And as long as capital can more easily than labor, that will remain the case.
However, the benefits of domestic manufacture far surpass the short-term profit that outsourcing can provide.
By manufacturing locally, we create jobs and support our economy. We also reduce our dependence on foreign oil and help preserve our environment by reducing carbon emissions from transportation.
Most importantly, we can ensure that the people who make our clothes are treated fairly and receive a living wage. What do you think? Are you convinced that it is worth paying more for American-made clothing?
Click on the graphic below to see how dramatically the cost and origin of our clothing has changed. And then continue reading to find out why.
The mid-1970s saw the emergence of large textile mills and factories in China and other developing countries in Asia and Latin America. These operations offered incredibly cheap labor and raw materials, as well as the capacity to quickly manufacture huge orders. By 1980, even though about 70 percent of the clothing Americans bought was still made domestically, a handful of big retail chains like Gap Inc. and J.C. Penney began transitioning away from actually making their own clothes. Instead, they increasingly just designed and marketed them, but outsourced production factories overseas where the work was done at a tiny fraction of the cost. Meanwhile, the same early adopters began to develop vast global supply chains that allowed them to divide up each step of the production process, sending the work to whichever location offered the cheapest, most efficient services. By 2003, Gap was ordering its clothes from more than 1,200 different factories in 42 countries, according to Elizabeth Cline, author of Overdressed: The Shockingly High Cost of Fast Fashion.
A successive wave of trade liberalization polices in the 1990s, including the North American Free Trade Agreement (NAFTA) in 1994, effectively wiped out most import restrictions and duties on foreign-made clothing. American retailers increasingly looked to suppliers in the Global South for all manufacturing needs.
Not surprisingly, American textile manufactures couldn't compete: between 1990 and 2011, about 750,000 apparel manufacturing jobs in the U.S. disappeared, according to the Bureau of Labor Statistics. The average U.S. garment worker, among the roughly150,000 who still remain, makes about 38 times the wage of his or her counterpart in Bangladesh, according to Cline.
Today the U.S. apparel market is the largest in the world, comprising about 28 percent of the global total. And hardly any of this clothing comes with a Made in the USA tag.