In the apparel industry, ‘Made in USA’ is an uncommon and highly sought after label. It is uncommon because the apparel industry in the USA has lost market share for decades to inexpensive foreign made goods. However, there are several reasons that the ‘Made in USA’ label remains highly sought after:
One reason is because Made in USA goods are renowned for their craftsmanship and quality. Another is that buying Made in USA supports the local economy. A third, and crucial reason, is that we can trust the fact that the workers who made the goods were treated fairly and humanely. The United States has extremely robust labor laws and worker’s rights so unlike some factories abroad, workers here are not forced to live in poverty or work in dangerous conditions.
At the same time, many argue that strong labor laws and oversight are hurting the US apparel industry. They contend that without these laws, employers would be able to be more competitive with foreign countries. These laws create barriers to entry and make doing business more difficult. I would argue, however, the difficulty these laws create for employers are precisely what set the US apparel industry apart and make it great.
Los Angeles is a prime example of this. Over one-third of US apparel manufacturing happens in Southern California. In LA, the fashion industry takes in over $18 billion dollars a year and employs almost 100,000 people – twice as many people as in New York City. Yet, Los Angeles is perhaps the hardest place to legally start and maintain a fashion manufacturing business. There are requirements from agencies at the local level all the way to the federal level. In order to manufacture clothing in LA, one must abide by the following:
- • Get a Garment Manufacturing License from the State of California, which requires an examination and fees ranging from $750 to $2500.
- • Pass a Los Angeles County Health Department inspection and pay fees between $300 and $1000.
- • Register a business license with the City of Los Angeles Finance Office
- • Register a DBA with LA County
- • Obtain Federal Employment Identification Number (EIN)
- • Register with the California Employment Development Department and pay taxes on wages paid to workers Get Worker’s Compensation Insurance
- • Obtain General Liability insurance
- • Comply with the steadily increasing LA minimum wage
- • The list goes on!
These laws can cause massive headaches for a manufacturer – but, at the same time, are incredibly important that they exist. The high level of rigorous protection of workers results in an environment where workers are safe, paid fairly, and protected from exploitation. Because of this, the goods produced by these workers are of the utmost quality and are highly prized the world over. You can find more information around these laws here.
There are, of course, unscrupulous businesses that flout these rules and regulations. They don’t pay all wages that are due and don’t observe safety and health requirements. Every so often you hear about one of these businesses burning down or being raided by the FBI for money laundering. It shouldn’t be a wonder that products from these types of business are shoddy and sub-par. They are to be avoided.
If you are considering producing your line in the US, do your part in protecting workers, and yourself, and remember to ask your manufacturer for their registration number. If they roll their eyes and say it’s too difficult to follow the laws, they probably aren’t someone you want to trust with your goods and money!
Committed to manufacturing in the US? Get started with our plans here.