Favorite Fabrics

The business section of our local newspaper contained this fascinating article about the garment industry in Haiti:

http://www.buffalonews.com/2010/02/2...-industry.html

While we sew because we enjoy it, how different it is for those who sew because they must.

This article discusses how a worker in the garment industry in Haiti earns $3.09 USD, which is their minimum wage, for an 8-hour day assembling mens suits that will be sold in upscale stores for $550.

For the $3.09, this particular worker can afford a cupful of rice, transportation to work via group taxi, and she can pay down the debt on her now-destroyed apartment; she sleeps on the street. (Read the article for MUCH more detail. It's a very worthwhile read.)

How is it, that of the $550 retail price of the suit, only $3.09 goes to the worker? How many other hands has this suit passed through, each taking a (successively larger) profit?

With so many members on this forum, I'm hoping that someone has experience in the garment industry, and might be able to explain what goes on between the factory and the storefront, to explain these disturbing numbers that I cannot make any sense of.

earthwalker

It's not only the garment industry where this occurs. That is why so many developed countries source and manufacture overseas. I was talking to someone in the garment trade a few years ago...the markup on clothes and shoes that he was having manufactured o/seas and then selling in his boutiques was 600%.

Favorite Fabrics

Did you get a sense of who got that 600% markup? It can't all go to the retailer. Some must cover freight costs, and some must go to the owner of manufacturing facility... where does the rest of it go?

Lisanne

Thanks, this is something I want to read.

I've read a bit about the garment industry, don't know all that much.
1. There is the cost of the fabric, thread, buttons, etc.
2. I think most US apparel companies don't own the overseas factories, so while the workers may get $3.09 for the day, the factory owners probably get a good deal more.
3. As you said, there are shipping costs. No tariff costs, I see.
4. The US distributor and/or wholesaler would get money. I don't know if they do the trucking or if a trucking company also takes its piece.
5. Of course, the retailer marks the suits up yet again.
6. Don't forget advertising costs.

I see your point. At least for high-priced clothing, there is enough of a markup that there ought to be plenty of room to pay them much more.

But at that point, IMO, there's just no reason to pay overseas workers at all. Those jobs could be done here in the US, and they wouldn't even have overseas shipping fees. I am sympathetic to the Haitians' plight, but not at the expense of our own people who don't have work.

BellaBoo

I was told by a fabric wholesale buyer that the best quality cotton fabric costs .99 or less a yard to manufacturer over seas and that manufacture is making a profit from that low price.

earthwalker

The 600% was markup on landed goods...what a manufacturer pays their employees is essentially of no interest to the buyer. He views their products pays a price, including freight, then marks up when goods arrive. If an agent is involved the price he pays would cover commissions etc.

I agree manufacturing and production should be taking place locally (Australia in my case). But, like most developed countries we have legislation and laws to protect our workers...for example, minimum wages, occupational health and safety, supperannuation, worker's compensation...all boosts up the wages bill, so they source offshore. Fairness and equity doesn't come into it...just the reality of the bottom line and cold hard cash.

Yes, this is all pretty negative, yes it is an abuse of human rights, is it going to change? Probably not in our lifetime.

Marjpf

We don't treat piece workers much better here in the US. The work is mainly done by undocumented aliens that are paid by the piece (not by the hour) with no benefits at all. They also make barely enough to survive.
I agree with Earthwalker, it's an abuse of human rights, but I doubt we'll ever see it change.