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Import Dependence in the Fashion Industry: Effects on the U.S. Economy

Updated on April 14, 2018

The U.S. economy is constantly growing and expanding. One of the key features of this expansion includes the fashion industry. The fashion scene has a tremendous impact on highly respected jobs that pay high wages -- a $380 billion industry. This industry, which includes brands, wholesalers, retailers, and importers, employs millions of workers world-wide. Clearly, imports have a huge effect on this particular industry as well. “Made in China” is seen on millions of products, but why can’t it be “Made in America?” This question is in regard to whether or not these imports are good or bad for the U.S. economy. Industry analysts have observed that “Made in America” once again may be looking more attractive to U.S. retailers.

Although many products are manufactured overseas, much of the value that goes into the product start in America. Studies fail to take into perspective the value that is added in the process as a whole. According to an article on the economic impact of the fashion industry, one-third of the U.S. fashion industry’s imports come from China. These percentages don’t take into effect the value that goes into the manufacturing process, which would realistically make these percentages lower than stated. After the inventory process is complete, companies still need to compensate for the profitability of their merchandise.

A highly-valued fashion company isn’t solely based on the importing process. It relies on employees from a wide range of occupations to become highly-valued. There are designers, analysts, patternmakers, sewing operators, buyers, etc. Regarding the fashion industry, California and New York are essential to the whole process. These cities are home to almost two-thirds of American designers. Jobs boom. Yet, New York City is the fashion capital of America. NYC pays billions of dollars in wages to these fashion employees, plus tax revenue which is efficient for the U.S. economy. Trading and showcases allow for the attraction of visitors. Clearly, the fashion industry positively impacts the economy.

With every upside, there is a downside. The United States is one of the world’s largest apparel markets, but a majority of the clothing sold are made elsewhere. The fashion industry depending on imports means that many apparel manufacturing jobs have left the United States. There has been a decrease in blue collar jobs because it is being sent overseas. The cost to do business in some areas are cheaper than other areas, so the creation of jobs in low cost areas has affected the job industry in the United States. Since fashion businesses decide to manufacture its products in a country with cheaper labor costs, all of the people employed in the United States lose their jobs. It has a negative effect on the economy, especially when the businesses employ thousands of individuals.

Companies in the United States like to seek out the cheapest labor, resulting in job lost. Unemployment rates will rise and hurt the economy. Foreign countries have decreased their human rights standards to attract investments from big corporates. Examples of these standards include no child labor restrictions, no minimum wage laws, and unsanitary working environments. The clothing being imported to the United States from the developing countries are being produced in these factories with low human right standards. Companies will look for workers and young children that are willing to work long hours for low pays in factories that are not sanitary and safe. Yes, companies do in fact have lower costs, but they arise from the exploiting of these laborers.

Aside from Americans losing their jobs, job outsourcing may also lead to environmental problems. It was stated before that apparel manufacturing jobs are being reduced in the United States because the fashion industry depends on imports. Most countries are doing what they can to help save the environment, but some of these countries do not have strict rules. Developing countries will not have strict environmental laws to make themselves more marketable towards big companies. This may cause companies like the ones in the United States to want to build factories and operate in other countries because environmental laws are not as strict as they are in the United States. Building factories in countries without strict laws have contributed to global warming. This is a result of greenhouse gas emissions caused by rapid industrialization in these lenient countries. Climate change is not only affected by people's daily routines, but also the mass productions in factories. In the end, moving manufacturing jobs overseas because of the strict environmental laws may seem cheaper now, but will be very expensive in the future.

With the fashion industry’s dependence on imports, comes some economic problems for the United States. Buying products in another country will reduce the income. This can cause some economic problems such as a trade deficit. This means that the United States imported more than exported. Depending too much imports can really hurt the economy. There is the danger that there will be a sudden large change in the currency exchange rate. For example, this may result in a tremendous loss if the peso falls in value. The fashion world is viewed as one of the biggest markets in the United States. Lots of money is going out due to the huge dependence on imports. This affects the economy negatively because more money is being spent than it is being made.

In conclusion, importing in the fashion industry has brought not only advantages to the United States’ economy, but has also had harsh effects on it. Imports from the fashion world helps the rapid economic growth in the United States, but there are also consequences on the economy that comes with the growth. Importing clothing is absolutely inevitable. In our opinion, fashion companies in the United States should not stop importing overall but should try to reduce their dependence on it. Importing can definitely help an economy growth and prosper, but too much importing can also hurt an economy badly.

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