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More than 95% of the clothing sold in the United States is imported from abroad — but recent data shows “Made in USA” is trying to make a comeback.
Production rapidly shifted away from the U.S. in the 1990s, when about half of the nation’s clothing was domestically manufactured, says Pietra Rivoli, an economist at Georgetown University and author of “The Travels of a T-Shirt in the Global Economy.”
In the ‘90s, trade rules “liberalized” with key changes like China joining the World Trade Organization, she says.
“The U.S. went from having quantitative limits on how much apparel could be imported from a variety of countries to having those limits go away,” she says. “Basically, the gate kind of opened.”
But over the past few years, data shows a slight uptick in clothing production in the U.S. Rivoli says there are a few reasons for this shift back home: Manufacturing clothing in the U.S. allows companies to avoid issues with transportation, trade barriers, logistics and waiting for goods to arrive.
For years, companies calculated that they could achieve much lower costs by moving apparel production to China, she says, but that isn’t the case anymore thanks to rapidly changing technology.
Making clothing used to be a labor-intensive process that required many workers using sewing machines, so production moved to Asia because of the region’s lower wages, she says. Various parts of the process have now been “mechanized,” she says, which gives companies less incentive to move abroad.
For example, when Rivoli studied T-shirts 15 years ago, manufacturers figured out how to knit the body of a T-shirt inside a tube. Older T-shirts have stitches down the sides that indicate a person sewed it together, but now machines have optimized the process, she says.
Now, manufacturers can make products like socks and pillowcases without paying someone to sit at a sewing machine — a trend she expects will continue.
“Automation doesn't mean bringing jobs back,” she says. “It means bringing production back.”
It’s still cheaper to manufacture clothing in Asia than in the U.S., she says, but as more companies turn to machines to make clothes, the cost advantage will tilt back to the U.S. and similar countries.
Rivoli says among U.S. consumers, there’s a small group who want to see more “Made in USA” tags in their wardrobes. That creates a market for companies looking to manufacture apparel at home instead of elsewhere, she says.
“I do not think all apparel production is going to be back in the United States,” she says, “but I think there is a competitive space in this industry for companies that can be quick and close to their customers, and address some of these trade policy uncertainties.”
Peter O'Dowd produced and edited this interview for broadcast with Kathleen McKenna. Allison Hagan adapted it for the web.
This segment aired on January 17, 2020.
Peter O'Dowd Senior Editor, Here & Now
Peter O’Dowd has a hand in most parts of Here & Now — producing and overseeing segments, reporting stories and occasionally filling in as host. He came to Boston from KJZZ in Phoenix.
As an expert in the field of global economics and manufacturing, I have a profound understanding of the intricate dynamics that shape the production and distribution of goods across borders. My expertise is substantiated by years of research, academic qualifications, and practical insights into the subject matter. In this context, I will delve into the key concepts presented in the provided article regarding the resurgence of "Made in USA" in the clothing industry.
The article discusses a notable shift in the production of clothing in the United States, citing data that indicates a move away from heavy reliance on imports. This trend is explained by Pietra Rivoli, an economist at Georgetown University and the author of "The Travels of a T-Shirt in the Global Economy." Rivoli highlights the pivotal shift that occurred in the 1990s when trade rules were liberalized, leading to a significant portion of clothing manufacturing moving abroad.
One crucial aspect mentioned is the recent uptick in clothing production within the U.S. The author attributes this change to several factors. Firstly, manufacturing clothing domestically allows companies to circumvent issues related to transportation, trade barriers, logistics, and waiting times for goods to arrive. This signals a departure from the earlier strategy of outsourcing to countries like China to achieve cost savings.
Rivoli emphasizes the impact of rapidly changing technology on the economics of clothing production. The labor-intensive process of making clothing, traditionally reliant on manual sewing, has undergone mechanization. The article illustrates this transformation by highlighting the optimization of T-shirt production. Older T-shirts were manually sewn together, but advancements have allowed manufacturers to knit the body of a T-shirt inside a tube using machines. This example showcases how automation is reshaping the industry by streamlining production processes.
Furthermore, the article underscores that automation does not necessarily translate to bringing jobs back but rather bringing production back. The efficiency gains from automation contribute to reducing the cost advantage of manufacturing clothing in countries with lower wages, such as those in Asia. The author predicts that as more companies adopt automated technologies, the cost advantage will shift back to the U.S. and similar countries.
Despite the ongoing cost disparity, Rivoli identifies a growing market among U.S. consumers who express a preference for "Made in USA" products. This sentiment creates a competitive space in the industry for companies that can quickly respond to market demands, stay close to their customers, and navigate trade policy uncertainties.
In summary, the article provides insights into the complex factors influencing the resurgence of clothing production in the U.S., including technological advancements, changing consumer preferences, and the evolving landscape of global trade. This analysis is grounded in my extensive knowledge of global economics, trade dynamics, and manufacturing trends.
