"Standard" and "Advanced" Practices in the North American Garment Industry

This is the first industry study undertaken by the Secretariat of the Commission for Labor Cooperation. The garment industry was chosen for the first such study for several reasons. It is a significant source of employment in all three countries. It is among the industries that have been heavily impacted by recent trade agreements, including NAFTA. Perhaps the most important factor in choosing the garment industry for this first study, however, is that it is an industry which has been characterized by relatively labor-intensive techniques of production, low wages relative to other manufacturing industries, and relatively low levels of unionization. As a result, minimum legislated labor standards and their enforcement are significant determinants of actual wages and terms of employment. The garment industry presents an opportunity for governments to use enforcement of labor standards, including positive incentives for compliance, to encourage industries to choose a high-skill, high-productivity path to meeting global competition, rather than resorting to substandard wages.

This study examines measures taken by governments, industry associations, particular firms, labor unions and other actors to respond creatively to today's competitive conditions. It describes the conditions in the industry created by trade liberalization and increasing competition, as well as by changes in consumer demand and the restructuring of the industry from retail to production. Numerous firms identified as good employers and successful competitors were visited in all three countries, and interviews were conducted with managers, workers and unions. Government officials responsible for enforcement of labor standards in the industry were also interviewed, and certain innovative public programs were investigated in depth. Regional and industry initiatives were explored.

The resulting study identifies various strategies and practices that have been developed to deal with increasing competition in the industry. It describes the impact of these practices on the business performance and employment situation of the firms that implement them. Finally, the report explores the relationship of these strategies and practices to legislated labor standards. A key theme throughout the study is the particular importance of labor standards to a labor intensive, low-wage sector and the value of strategic compliance strategies supported by the leading private sector players in the industry itself.

The study begins with an overview of the garment industry and its workforce in North America and in each of the three countries. There follows a discussion of the context of trade and trade agreements for this sector in the NAFTA countries. Key labor standards in each of the three countries are briefly reviewed, and the special challenges to labor law enforcement in this sector, as well as its particular importance, are discussed. An innovative strategy developed by the U.S. Department of Labor to enforce labor standards in the garment industry is presented in some detail.

At this point the study reports a synthesis of the information received through visits to companies throughout North America. It describes a chain of development by which firms move through greater reinvestment in technology and human resources to higher levels of productivity and performance. Through these improvements firms are able to comply with and exceed legal labor standards while remaining competitive in the global market. A subsequent chapter reviews advanced approaches to the organization of work, which go beyond meeting minimum standards and are geared to new demands of the industry. Government and industry partnerships are also examined which assist companies to shift production out of the low-tech, low-wage path that has characterized the industry toward a higher-skilled, higher-productivity and higher-quality mode of production. A final chapter offers conclusions.

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