Sourcing at MAGIC 2021: What’s On the Horizon for Trade Policy and Sourcing

About the seminar: A look at apparel sourcing trends and the impact of trade policy decisions on a successful sourcing strategy.

  • US apparel trade policy updates 1:27
  • US apparel sourcing trends (extended version) 14:45

Speakers:

  • Julie Hughes, President, US Fashion Industry Association (USFIA)
  • Dr. Sheng Lu, Associate Professor, Fashion and Apparel Studies, University of Delaware

California Garment Worker Protection Act (Senate Bill 62) Passed, and Debates Continue

About Senate Bill 62

  • The new law bans the long-standing piece-rate system — 5 cents to sew a side seam, for instance, or 10 cents to sew a neck — that often adds up to less than $6 an hour (source: LA times). From now on, garment workers in California will get a minimum wage of $14 per hour for employers with 26 or more employees.
  • The new law’s “brand guarantor” provision would extend the liability for wage theft from the factories themselves to the brands and retailers that sell the clothes, as well as any subcontractors in between. In other words, the bill creates new liabilities across California’s clothing supply chain from factory subcontractors to retailers. (source:  San Francisco Examiner)

Concerns about Senate Bill 62

According to the American Apparel and Footwear Association (AAFA), the California Garment Worker Protection Act “does not recognize that brands or buyers may have little to no control over how a particular garment factory employer manages their payroll or enterprise finances.” AAFA explains why this new law in actuality could punish good actors:

Brand Good contracts with Manufacturer Y to manufacture their clothes, paying a good price, more than enough to pay required wages to Manufacturer Y’s employees. However, in an effort to generate more business, Manufacturer Y also takes a low-bid contract from Brand Bad, so low that both Manufacturer Y and Brand Bad know Manufacturer Y will not be able to pay required wages to its employees. Under this bill, Brand Good would be liable for any wage claims resulting from Manufacturer Y’s acceptance of a low-bid contract completely unrelated to its operations.

The legislation would make responsible brands like Brand Good legally liable to pay for wage claims resulting from Manufacturer Y’s and Brand Bad’s unlawful or irresponsible activity. SB 62 will not deter bad actors like Brand Bad from operating in California’s garment manufacturing industry. Instead, it will penalize responsible companies like Brand Good, even though Brand Good did the right thing. As a result, Brand Good, and other responsible brands, will no longer allow their branded garments to be manufactured in California out of fear that they will acquire additional liabilities over activities they don’t control.

More than 60% of garment factories in the US are based in California.

Further reading:

Discussion question:Based on the video and the readings, what is your view on the California Garment Worker Protection Act? What changes could it bring to the fashion apparel industry and why?

(Disclaimer: All posts on this site are for FASH455 educational and academic research purposes only, and they are nonpolitical and nonpartisan. No blog post intends to either favor or oppose any particular political party/public policy, nor shall be interpreted that way)