69.6 Percent

Bet you thought I’d forgotten all about China Ate My Jeans. Never. I’ve been shopping, studying, interviewing experts, learning about skilled and unskilled manufacturing. My desk (a 1940s-era drop leaf table I found at a second hand store) overflows with information.

On this Good Friday, I’ve been thinking about the poorest amongst us. And I’ve been wondering, selfishly but sincerely, how to help them without giving up much myself. Sorry. Have to be honest here. These thoughts began this morning. I was going to go to church–where every good Christian belongs today–but then decided to quickly check the just-released U.S. Department of Labor statistics for March. So if my pastor, Father Gerry, asks why I wasn’t at Good Friday services I’ll simply say it was the government’s fault. (He’ll assume I was working on my taxes. Surely he’ll forgive me).

The most intriguing statistics? Employment status of civilian population 25 years and over by educational attainment. Did you know that unemployment among those without a high school diploma is now 12.6 percent (or 1,449,000)? Unemployment of those 25 and over with a high school diploma but no college degree: 8 percent or 2,902,000. The media, from what I’ve read today, aren’t discussing those two out-of-work groups. Yet together they total a whopping four million individuals. Meanwhile, newspapers today collectively high-five the 30.4 percent of Americans 25 years and over who now have college degrees, an historically high number. Good for them. But what about the other 69.6 percent? What about the 4,351,000 Americans 25 years and over who are unemployed and have no education beyond high school, if that?  

Some globalization-enthusiasts argue the United States doesn’t have a large enough labor pool to compete for apparel manufacturing jobs with China or India. Others say America has moved beyond unskilled manufacturing altogether. According to yesterday’s New York Times, “a revolution in manufacturing employment seems far-fetched. Most of the factory jobs lost over the last three decades in this country are gone for good. In truth, they are not even very good jobs.” Ouch. Tell that to Orwigsburg, Pennsylvania based apparel manufacturer FesslerUSA. According to Textile World:

FesslerUSA’s roots trace back to 1900, when Walter Meck, grandfather of the current CEO Walter Meck, left the family farm and founded M & Co., a cotton underwear manufacturer in the Pennsylvania Dutch riverport of Schuylkill Haven.

Now a supplier of knitted fabrics and apparel for more than 100 brands, FesslerUSA employs about 150 people. These workers produce over 100,000 garments a week at the company’s 150,000-square-foot, vertically integrated manufacturing facility. A custom software program drives the entire manufacturing process. Although its laces and elastics are sourced overseas, all of the company’s design services, knitting, cutting, sewing, folding, packing and final processing are in-house. Dyeing and finishing is done by a local dyer with whom the company has done business for 40 years. Yarn and trims are bought from manufacturers in North Carolina and Allentown, PA.

If FesslerUSA can do this sort of thing on a small scale, why can’t American companies that mass produce apparel overseas–Levi’s, Gap, Chico’s, Target, Walmart–do so on a larger scale here, too?

Betsy Stevenson, one-time chief economist at the Labor Department who spoke with The New York Times  for its in-depth look at Apple, Inc., doesn’t sound hopeful. “Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice. That’s disappeared. Profits and efficiency have trumped generosity.”

An unnamed Apple executive quoted in the same NYT piece underscores Stevenson’s pessimistic observations: “‘We sell iPhones in over a hundred countries. We don’t have an obligation to solve America’s problems. Our only obligation is to making the best product possible.’” Double ouch. Take that, unemployed Americans. Yet anyone with a stock portfolio can’t chastise Mr. Unnamed Apple Executive. More profits, if you please, sir.

I wonder: Can we still have it all? Profits, efficiency, and generosity? Consider this, from Bonnie Meck, COO, FesslerUSA:

When we say ‘family,’ we mean more than just immediate family; I consider every one of my employees to be part of my family. We think the key to running a successful business is not just making money, but making sure the needs of our employees–our family–are being met. Employee welfare is a very important part of sustaining a company.

Company executives like Bonnie Meck–and yes, more are out there–make me optimistic about future job prospects for our currently unemployed, undereducated 69.6 percent. We are all interconnected. If these folks can provide for themselves and their children, participate in our economy, see proof that they are, as Ms. Meck says, “important,” our society as a whole will benefit.

PS: By the way, in its piece about Apple, The New York Times estimates that iPhones manufactured here in the USA would cost consumers about $65 more per phone. If you haven’t yet, please read the entire enlightening piece. Well worth your time. Would you be willing to pay $65 more for a Made in the USA iPhone?

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7 Responses to 69.6 Percent

  1. Carolyn says:

    Yes! I would definitely be willing to pay more for an American made phone. However Apple should consider that there are consumers in this country who will not buy anything made by Apple until it is made in the USA by American workers.

    If Apple really wanted to make the best product, they would not make their products in third world countries who steal their technology and continually “widening profit margins through a reduction in the quality of materials.”

    http://knowledge.wharton.upenn.edu/article.cfm?articleid=1776

    • Tina Polito says:

      Hi Carolyn,

      Thanks, as always, for your informative response and the link to the Wharton piece. Yes, Chinese factory owners do reap higher profits on the backs of their workers. Some would argue though–playing devil’s advocate here–that the workers are still better off than they used to be; their low wages have nevertheless lifted them into China’s rising middle class.

      I would be hypocritical if I totally slammed Apple. I use its products (and love them) as well as other company’s products that are Made in China. Anyone who owns a cell phone, computer, printer, etc has no choice (other than a single product here and there). But soon–I’m convinced–some savvy Silicon Valley business people will look at the PR possibilities and revive the Made in USA electronics market. Maybe I’m nuts. Hope springs eternal in this American daughter / wife / mother’s soul.

  2. Michele says:

    Tina,
    You are awesome! This is such a great piece!! Thank you for taking all that time to put this together. I need to find away now to spread your article. I can’t agree with you more. I had to laugh, my favorite part was this line:
    “Some globalization-enthusiasts argue the United States doesn’t have a large enough labor pool to compete for apparel manufacturing jobs with China or India. Others say America has moved beyond unskilled manufacturing altogether.”

    UN-believable! I would love to meet these globalization enthusiasts face to face. This country has such a mix of different kinds of people who all need and excel at different kinds of jobs. We all can’t be doctors or lawyers…. oh wait, but I guess we can all work at Walmart – right? (lol) We’ve turned from a manufacturing country to a service country, and who’s fault is that? Certainly not the people who were working those jobs. They make it sound like all Americans turned their noses to these types of jobs because they weren’t good enough. Tell that to all the laid off workers who used to work in factories who are now struggling to support their families.
    I could go on and on here, this is such a big angry topic for me. As for the cost of manufacturing the iPhone here…. hmmm…. those things are expensive enough (I don’t even own one), so what’s an extra $65? Right, compared to what they already cost? I already pay extra for other things that are made in the US, so I would certainly do it again. We’ve become so trained in this country to buy tons of things really, really cheap. We are conditioned to think that shorts and t-shirts should really cost like $5 (ok, you can probably figure out what store I’m talking about here….) If we go to another store (that actually makes those items here) we think they are outrageous. In the meantime that cost takes into account your neighbor having healthcare and being able to put dinner on the table every night. That’s what our country has lost touch with. Is there anyway to bring this type of thinking back? Also, I really wonder if it had to be an extra $65? These large corporations really need to sit down and discuss profits again. Greed had definitely taken over.

    • Tina Polito says:

      Michele,

      Thanks for your passion-filled response. I think it’s politcally perilous these days to suggest some people would be content working in a factory 9-5 making widgets. But the fact is, an entire segment of our society would be ok with punching a time card and having a reliable–albeit tedious–job. Let’s not forget it could be the first step toward a different job, a skilled job, and later perhaps a job in management. Also, each manufacturiing job creates multiple ancillary jobs in other sectors–design, delivery, sales, advertising, management, to name a few. Apparently Apple, Inc is building a facility in Austin, TX (not for manufacturing, however) and will employ a couple thousand people. Imagine if they did the manufacturing here, too. Hundreds of thousands would apply. Wouldn’t that be something? From our lips to Apple CEO Tim Cook’s ears…

  3. J.R. says:

    Well so much for FesslerUSA and the manufacturing dream they touted. They plan on closing down after all. Since the recession hit back in 2008 the company never really fully recovered even though the CEO of the company tried to make it seem like it did. The company had a meeting with all of it’s employees approximately three weeks ago and along with the “Rapid Response” team of the Pennsylvania Department of Labor and Industry announced that they will be shutting down operations in the next few weeks. Being a former employee of the company as a result of this shutdown, I am deeply disappointed in this move. It doesn’t matter that many employees put years of service into the company now. The fact is that the orders just stopped coming in. Companies simply do not want to pay American prices when they can do it cheaper overseas. As long as you have American retail customers that will continue to buy cheaper products from other countries, ESPECIALLY China, the chances of manufacturing being what it once was is zilch!! And the way the company is trying to hide this fact is a disgrace! Despite trying to promote himself and his company, the reality is finally sinking in. Manufacturing in the United States, at least in the garment industry, is a thing of the past ESPECIALLY after the recession hit in 2008 sealed it’s fate.

    • Tina Polito says:

      J.R.

      This is simply astonishing news. I am deeply saddened. FesslerUSA seemed to be a great example of an American company in the garment industry that somehow thrived against all odds. Thank you so much for alerting me to this turn of events. My heart goes out to you and the other employees now out of work. What will you do next?

      • Carolyn says:

        Is it the American retail customer who wants the cheaper products that are made in other countries or the American retail stores that will not stock American made products such as clothing, bath towels, or bed sheets? These foreign made products are not only lower priced but lower quality and getting worse each year.

        It is so discouraging to shop for clothing for children over the age of two. Recently I shopped at Macy’s for women’s and children’s clothing. I left without buying anything because of the low quality and dreadful design – all foreign made. Perhaps I must try shopping at some different stores.