Sunday, August 26, 2012

Made in Everywhere But America

I noticed that an Angels cap I bought at Angels Stadium said "Made in china." Then I noticed that an Angels jersey from Costco said "Made in Swaziland."

Made in Swaziland?

Yes, Made in Swaziland!

As the song goes, "Something's happening here, but I'm not exactly clear what it is."

Then I knew.

I remembered a lesson from my high school economics class. We had a new, energetic teacher who assigned a non-traditional textbook by Robert Heilbroner, The Worldly Philosophers, or maybe it was the just published The Making of Economic Society. I'm fairly certain it was the first. Either way it was fascinating and I became an Econ major in college. The high school class was much more interesting than the 5 hour Macro Economics course.

Here's the lesson.

An impoverished country trying to create jobs will turn to textiles. The cost of human labor is cheap for those countries. They can mass produce textiles cheaper than any industrialized country with high wages.

Check where your school and sports team apparel were made.

I have T-shirts and sweatshirts from Michigan, USF, Chapman, University of Washington, Los Angeles Angels of Anaheim, Cal Western, and LSU (don't ask).

They were made in Cambodia, China, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras,  Mexico, Nicaragua, Peru, Swaziland, and Vietnam. Most were from Latin America with Honduras in the lead.

The only items from the United States were decades old or from Crazy Shirts.

Crazy Shirts is an example of the few exceptions to the drive to imported apparel. Either the domestic provider provides a value added product, such as uniqueness, for which consumers will pay a premium, or a higher quality product. Crazy Shirts meets both exceptions.

How many suppliers of sport apparel offer unique or high quality merchandise?

Hence the shift offshore.

How important is the textile/apparel industry to an economy?

It started America's Industrial Revolution.

England relied on its textile industry two centuries ago for economic success. It forbad the export of textile machines, specifications, and drawings.

Francis Cabot Lowell visited several English mills in 1811 prior to the War of 1812. He memorized the workings of the British mills. He and a few fellow investors built a mill in Waltham, Massachusetts. Business was so good they expanded to Lowell, Chicopee, Manchester, and Lawrence. The Industrial Revolution was born in Massachusetts, based on water power.

In a sign of the future, the textile industry migrated decades later to the South. Labor was cheaper in the South.

The U.S. Olympics Team apparel could have been "Made in the United States," but the major American suppliers don't look to the United States anymore. They like the large profit margins from the Third World.

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