The changing geography of the clothing industry

The changing global geography of clothing manufacturing
Source: Adapted from China Sourcing Blog (2012)

출처 : The Geography of the World Economy by Paul Knox (6th) (2014) - 168page

The changing geography of the clothing industry

The clothing industry provides a good example of the way in which local economic
geographies are affected by an industry’s response to globalization. In the nineteenth
century, the clothing industry developed in the metropolitan areas of core countries, with
many small firms using cheap migrant or immigrant labor. In the first half of the twentieth
century, the industry, like many others, began to modernize. Larger firms emerged, their
success based on taking advantage of mass-production techniques for mass markets, and on
exploiting principles of spatial organization within national markets. In the United States, for
example, the clothing industry went through a major locational shift as a great deal of
production moved out of the workshops of New York to big, new factories in smaller
towns in the south, where labor was not only much cheaper but less unionized.

Then, as the world economy began to globalize, semi-peripheral and peripheral countries
became the least cost locations for mass-produced clothing for global markets. In 1960, less
than 7 percent of all apparel purchased in the United States was imported; in 2012, the
American Apparel & Footwear Association reported that nearly 98 percent was imported.
Leisure wear—jeans, shorts, t-shirts, polo shirts and so on—was an important component
of the homogenization of consumer tastes around the world, and it could be produced most
profitably by the cheap labor of young women in the peripheral metropolitan areas of the
world. The hourly compensation (excluding benefits) of clothing workers in the United
States ranges from $8.25 to $14.00; their counterparts in Asia (excluding Japan) average
about US$3 an hour, with the labor costs in China and India under US$1, and in Cambodia
and Bangladesh less than 25 cents. There are also inequalities in the wages of male and
female workers (even in Europe, men in the textile, clothing and footwear industries make
20 to 30 percent more than women). While the retail margin on domestically made
garments sold in Europe and the United States is 70 percent or so, the retail margin on
clothing made in workshops in countries such as Bangladesh and Vietnam is 100 to 250
percent. A typical example of how the sale price of a $100 garment is divided up would be:
$50 to the retailer, $35 to the manufacturer (who spends $22.50 on textiles) and $15 to
the contractor, who pays the garment workers $6. The apparel and textile industries
together represent the largest industrial employer in the world. Apparel, over half of that
industry, employs more than 25 million workers in the garment industry in the semi-
periphery and periphery, of whom 75 percent are women. Studies of the industry have
shown that some of the female workers are as young as 12-year-old girls from rural villages
who have been sent to work as sewing machinists in city workshops, sleeping eight to a
room, sewing seven days a week from 8 am to 11 pm. Child labor is also widespread in
subcontracting arrangements that make use of homeworkers.

This globalization of production has resulted in a complex set of commodity chains. Many
of the largest clothing companies, such as H&M, have most of their products manufactured
through arrangements with independent suppliers (about 800 factories in the case of H&M).
These manufacturers are scattered throughout the world, making the clothing industry one
of the most globalized of all manufacturing activities (see Figure 6.4). H&M has its goods
produced in low-cost Asian and European countries. The actual geography of commodity
chains in the clothing industry is somewhat volatile, with frequent shifts in production and
assembly sites as companies and their suppliers continuously seek out new locations with
lower costs.

Although cheap apparel can be produced most effectively through arrangements with
multiple suppliers in low-wage regions, higher end apparel for the global marketplace
requires a different geography of production. These products—women’s fashion, outerwear
and lingerie, infants’ wear and men’s suits—are based on frequent style changes and high-
quality finish. This requires short production runs and greater contact between producers
and buyers. The most profitable settings for these products are in the metropolitan areas of
the core countries—London, Los Angeles, Milan, New York, Paris and Stuttgart—where,
once again, migrant and immigrant labor provides a workforce for designer clothing that can
be shipped in small batches to upscale stores and shopping malls around the world.

The result is that commodity chains in the clothing industry are quite distinctive in terms
of the origins of products destined for different segments of the market. Fashion-oriented
retailers in the United States who sell designer products to upmarket customers obtain
most of their goods from manufacturers in a small group of high-value-added countries
including France, Italy, Japan, the United Kingdom, and the United States. Department stores
that emphasize private-label products (that is, store brands, such as Nordstrom) and
premium national brands will obtain most of their goods from established manufacturers in
semi-peripheral Asian countries. Mass merchandisers who sell lower priced brands buy
primarily from a third tier of lower cost, mid-quality manufacturers, while large-volume
discount stores such as Wal-Mart import most of their goods from low-cost suppliers in
steady growth supplier such as Bangladesh, China and Vietnam (see Figure 6.4).