Jobs disappear despite high productivity
If textile and apparelmakers in the United States were graded on their progress, they would no doubt receive an A-plus. They have gone from inefficiency and undercapacity to record high levels in both areas. And the $17 billion they spent modernizing textile mills has made this $46 billion industry one of the most efficient in the US.
``A number of industries would kill for 90 percent capacity utilization who aren't getting special protection,'' says Martin Lewin, of the American Association of Exporters and Importers.
Some economists are worried, however, that the industry is too protected from foreign competition, and this could retard the ability of textile and apparelmakers to compete globally, hinder access to foreign markets, and stymie domestic consumption later on.
Output, operating capacity, and profits at textile and apparel plants reached record highs in 1987, according to a recent Federal Reserve statistical release. Unemployment has fallen this year and wages have gone up in states where the industry, which is the largest manufacturing employer of women and minorities, is a major source of jobs.
Domestic textile production rose 6.5 percent last year, and profits were up 67 percent, according to the Council of Economic Advisors. Meanwhile, during 1987, foreign imports grew only about 3 percent, down from previous increases of 18 percent to 20 percent.
In these optimum conditions, however, the industry has continued to lose jobs, according to both management and labor. More than 370,000 jobs have disappeared since 1980, 16,000 of which were lost during the first six months of this year, according to the latest Department of Commerce figures. The industry blames this on the dramatic 30 percent rise in imports in 1984, and last year's 16 percent increase.
Most of the competition comes from Hong Kong, Taiwan, South Korea, and China, says Evelyn Dubrow, legislative director at the Washington office of International Ladies Garment Workers Union. These four countries, which send 75 percent of all US imports, pay their workers far less than American companies, and provide few if any benefits or holidays.
``There's no way we can compete with that,'' Ms. Dubrow says.
She points to this year's performance, slower than last year's. Productivity fell from more than 90 percent to less than 88 percent, and profits have decreased by 12 percent.
But ``protection removes the pressure on the US [companies] to adjust their industry to compete internationally,'' says Laura Baughman, an economist who studied the impact the Apparel Trade Act would have on American consumers. And if the US closes its market, others will do the same, she says.
Although several studies make a connection between imports and lost jobs for US apparelmakers, no such connection has been proven between textile imports and job losses, since the latter does not involve the same labor-intensive cutting and sewing that is a major part of producing clothing.