For the past 30 years, the experts have been telling me that increasing profits is good —a sign of a stronger economy, while increasing wages is bad — a sign of inflation. These same experts have also been telling me that a flexible labor policy based on the unrestricted ability to layoff workers, invariably leads to reduced unemployment.
It now appears they were wrong. In the U.S. real wages are approaching record lows while unemployment is approaching levels unseen since the great depression. Profits are zooming up while at the same time the economy seems to be going to hell in a hand-basket. I wish only there was room in that hand-basket for those experts.
The belief that low wages are somehow beneficial to the economy has carried over to our own industry. For years governments in garment exporting countries have pursued policies to keep workers wages down, while customers have selected suppliers on the basis of low labor rates.
In the past there was indeed a relationship between low labor rates and low garment cost. That is now coming to an end.
Traditionally our industry consisted mostly of medium-sized (300-1200 sewing machines) locally owned factories that relied on semi-skilled, single-tasked sewing machine operators working in long assembly lines to produce large quantities of a few styles. In the past, there was little need to increase productivity for several reasons: wages were low, the supply of labor was almost infinite, and the time required to train a new worker very short indeed — as little as two to three months. In the traditional factory, the worker was a disposable tool — somewhat akin to a bobbin or a needle — easily replaced when worn out or broken.
To the rest of the world at large, the global garment export industry was seen as an atavism, a throwback to the 19th century world of Charles Dickens, where children toiled long hours in terrible conditions for little or no pay. From the point of view of the governments in garment exporting countries, the industry was a necessary evil, something to be phased out as soon as possible and obliterated from the national memory as soon as the country passed from developing nation status.
Today the global industry has changed because the needs of the customers have changed. Brand importer and retailer consolidation has created an oligopsomy where a small number of customers control entire retail markets. At the same time these giant customers have sharply reduced the number of their suppliers. The traditional fashion-trend-based industry has been replaced by an item-based industry where specific style types appear, dominate sales for a limited period of time only to disappear, replaced by other items.
In this new industry, speed-to-market, design integrity, and sustainability have become key facilities which factories must provide if they are to retain their customers.
Because of these changes, the traditional industry is rapidly disappearing, replaced by a new and very different garment exporting industry. This new industry is dominated by large-scale (10,000-50,000+ machines) regional or transnational factory groups relying on multi-tasked garment makers often working in team or modular units to produce smaller quantities of many styles. With rising overheads coupled with the demand for speed-to-market, productivity is now an important issue. Labor shortages have become endemic even in countries with large populations. The time required for worker training has increased from 2-3 months to 6-12 months. In the new factory the worker has become a valuable capital asset, now akin to a fusing machine or a computerized laser cutter, someone to be valued and carefully maintained.
At this very moment, when our new industry is becoming increasingly dependent on a well-trained, highly motivated, and most importantly stable workforce we are moving in the diametrically opposite direction. Strikes have become endemic in Bangladesh, Cambodia and China where workers are demanding higher wages and better working conditions. Countries as far apart as Mexico, Cambodia, and Sri Lanka are falling prey to Nomadic Workers Syndrome — a pathological condition where workers move from one factory to another factory every six months for no rational reason.
Where once we treated our workers as disposable tools, those same workers are treating us as temporary accommodations — a place to stopover while looking for their next job.
Management has yet to accept the existence of these problems, let alone move towards finding workable solutions.
The new industry will place new demands on all of us — workers and management alike. Either management recognizes and accepts this new relationship with their workers or management must recognize and accept that they and their factories must forgo lean manufacturing, modular systems and other the other related production high-productivity operations.
The choice is quite simple. Either you join the new industry or remain locked in the past with the old industry
For some this will be a hard decision.