The fall of American Apparel; is now the time to embrace globalization?

American Apparel advert. Made in USA

American Apparel closed its doors for the final time this week after years of grappling with its accounts and reputation. The high street giant filed for bankruptcy in 2016 after a string of lawsuits came out in the years preceding against its founder Dov Charney. The American Apparel appeal was built on it’s Terry Richardson inspired, hyper sexualised images and manufacturing its clothes in Downtown LA. American pride and soft porn, what’s not to love? But ultimately these two marketing pillars were in part responsible for the company's collapse. Sexual harassment complaints and fair wages driving up the cost of clothes has left a tarnish on the brand synonymous with vintage wearing hipsters and has left sales dwindling.

Can we afford Made in USA?

The living wage in LA currently stands at $12 an hour, $4 more than the minimum wage of $9, and roughly what a garment worker at American Apparel gets paid. In 2015 The LA Times reported that according to the Institute for Global Labor and Human Rights, this makes a long-sleeved shirt made in the U.S., costs around $13.22 to make, including $7.47 for labour. If you can imagine how labour costs like these could inflate prices across all household goods, it’s hard to imagine how those living on minimum wage could afford anything manufactured in the U.S.

The American Apparel case has been in the press for almost a decade and yet the issue of  ‘Made in America’ even made it into newly elected President Trump’s inauguration speech. The economical and ethical strain of keeping manufacturing in the USA gives cause to consider outsourcing to countries like Bangladesh or China. However the incentive needs to be ethical not exploitative. The only way to do that is to embrace globalization - a word not on the top of Trumps list of buzzwords.

The Trans-Pacific Partnership and policing international trade

After years of negotiation under Obama’s presidency, a trade deal between the United States and 11 other Pacific Rim countries collapsed within the first week of Trump’s time in office. Essentially the pact would have addressed a number of issues that are putting strain on an increasingly global market, including e-commerce and financial services. In terms of international trade laws, it worked towards making outsourcing and manufacturing a safer place for workers by imposing rigorous environmental and labour standards and the supervision of intellectual property rights.

However, one of the key reasons to abandon the pact, according to it’s criticizers, was because the TPP aimed to abolish imposed tariffs and quotas between the Pacific Rim countries, leaving them fearing a free-market will rob the United States of jobs and local manufacturing that has otherwise been protected by existing tariffs.

How could globalization benefit you?

As in the case of American Apparel, the idea of ‘made in the USA’ is a nice idea but not something consumers are actually prepared, or have the resources, to pay for. This week, a documentary aired on Channel 4 in the UK, exposing the poor wage of £3 an hour in a factory in Leicester, £4.20 under the national living wage of £7.20. The boss was caught on camera saying “We don’t get paid much for our clothes, and we need to compete with China and Bangladesh.They can get it cheap there. How will they get it made cheaper here? If we pay everyone £10 or £6 then we will make a loss.”

The responsibility of paying a fair wage doesn’t lie solely with the manufacturer, but with the consumer too. Yes we should expect to pay more clothes, but is it realistic to entrust consumers totally to boycott habits that have been instilled in them for the last couple of generations? We are already making the choice to integrate the world’s trade by refusing to pay more for clothes. As consumers we need to acknowledge how our choices are already acting in support of globalization. By embracing building relationships and develop pacts means to better police international policies and thus come face to face with companies who are exploiting workers.