American Flannel

From The Wall Street Journal:

Many years ago, during a reporting trip to Copenhagen, I met an economist for the Danish labor federation. I had just visited a company that was transferring production of hearing aids abroad, and I asked him about this move. To my surprise, the economist was entirely in favor. “We want to be a wealthy country,” he said, “and we can’t be a wealthy country with low-wage jobs.”

That conversation came back to me as I read a pair of books about people committed to reviving U.S. garment manufacturing. Both Steven Kurutz’s “American Flannel” and Rachel Slade’s “Making It in America” follow entrepreneurs who have dared to produce American-made apparel at a moment when the domestic supply chains for such products barely exist. Both books are interesting to read. The human stories are moving, the founders’ determination admirable. But neither book finally provides a convincing answer to a question that lurks in the background: Should we even want apparel manufacturing to rebound in the U.S.?

Mr. Kurutz introduces Bayard Winthrop, a descendant of the first governor of the Massachusetts Bay Colony. He grew up in Greenwich, Conn., and spent two years on Wall Street before deciding to seek more meaningful work. After stints selling snowshoe bindings and marketing messenger bags, he created American Giant in 2011 to manufacture clothing in the U.S. Labor costs precluded products that would have required extensive sewing. Instead, Mr. Winthrop settled on cotton hoodies with heavier fabric and better construction than most others. A favorable news article brought a flood of orders, enabling American Giant to buy sewing plants and inspiring Mr. Winthrop to attempt a far more complicated product: the flannel shirts to which the title of Mr. Kurutz’s book alludes.

For guidance, Mr. Winthrop turned to James McKinnon, the head of Cotswold Industries, a family-owned textile company. “Flannel is an art and an art form,” Mr. McKinnon explains. He introduced Mr. Winthrop to small companies that had survived the textile industry’s contraction and that might have the skills and equipment to dye yarn and finish cotton fabric the way Mr. Winthrop wanted it. Mr. Kurutz’s on-the-scene reporting provides a ground-level view of what it means to reassemble a domestic supply chain for flannel, colorfully illustrating why “reshoring” is so complicated a task.

Mr. Kurutz’s other main character is Gina Locklear, who grew up around her family’s sock mill in Fort Payne in Alabama’s DeKalb County. At the start of the 1990s, the author tells us, “there was hardly a man or woman in all of DeKalb County who didn’t have a connection to the hosiery business.” But as imports gained ground, the self-proclaimed “sock capital of the world” lost its kick. Many mills closed. In 2008 Ms. Locklear used spare capacity in her parents’ factory to start Zkano, a company that knits high-fashion socks from organic cotton spun and dyed domestically. The socks sold well. The challenge, she found, was finding workers. As Mr. Kurutz writes: “You could create new business. You couldn’t invent someone with thirty years of experience in the hosiery industry.”

Rachel Slade presents a similar story in “Making It in America,” featuring Ben Waxman, a former union official and political consultant who decided in 2015 to start a business with his then-girlfriend (and now wife), Whitney Reynolds. They mortgaged their home in Maine to fund American Roots. “Together, they would bring apparel manufacturing back to America,” Ms. Slade writes. “They would be uncompromising in their commitment to domestic sourcing and the welfare of their employees.” They began with a hoodie designed to fit large men doing physical jobs in harsh weather, a product whose manufacture required 54 operations on six different kinds of sewing machines. At $80, it was too expensive for the retail market, but Mr. Waxman sold it to labor unions that were delighted to offer members a garment made by union workers in the U.S.

I have no criticism of the individuals Mr. Kurutz and Ms. Slade profile. If these entrepreneurs can make a profit and create jobs by producing clothing in the U.S., congratulations are in order. They are well-intentioned people committed to doing right, and it’s hard not to admire them. But it’s disingenuous to pretend that a handful of mom-and-pop companies sewing hoodies and socks point the way to the revival of manufacturing in the U.S. Apparel is fundamentally different from most other manufacturing sectors; its factories still rely heavily on sewing machines, usually operated by women stitching hem after hem or attaching collar after collar. The U.S. has no great productivity advantage when it comes to making hoodies.

The authors present gauzy portraits of the industrial past. Fort Payne, Mr. Kurutz writes, was “a Silicon Valley for socks” where the annual Hosiery Week “bonded the community together” before the U.S. government lowered barriers to sock imports. That’s not exactly true: Silicon Valley is notorious for ample paychecks, Fort Payne’s sock mills less so. In 1993, the year before apparel and textile makers received what Mr. Kurutz calls a “death blow” from the North American Free Trade Agreement, the 5,478 hosiery workers in DeKalb County were paid, on average, 11% less than the average private-sector employee in the same county. In North Carolina, where American Giant does its sewing, the gap was even wider: The average private-sector worker was paid $22,000 in 1993, the average apparel worker $14,649. People took jobs in garment factories not for bonding but because that was all they could find.

The American garment industry was in decline for decades before Nafta. That it survived as long as it did was due to strict import quotas and high tariffs on both textiles and apparel, fought for by an unholy alliance between garment-workers’ unions and virulently antiunion textile manufacturers. The result was that U.S. consumers were forced to pay high prices for linens and clothes to keep those industries alive.

Link to the rest at The Wall Street Journal

A very long time ago, PG practiced law in a small town located in a part of the United States not known for its wealth.

One of his clients was a small garment manufacturing business owned and operated by a husband and wife. As per expectations, the business employed mostly women and paid minimum wage or something close to it.

The jobs offered provided important income for families, including single mothers, but nobody expected to get rich working there. Had the garment manufacturer closed its doors, the result would likely have been an increased number of families relying on welfare payments for their survival.

In some circles, low-wage jobs are regarded with disdain, but they can play an important economic role in small communities as a first job or an emergency job in the event of a change in family structure or injury to a working member of a family.

In PG’s observations during this time period, while government welfare was sometimes necessary for families with no ability to support themselves, having a job-holder in the family made a positive overall improvement to the family’s long-term stability and happiness.