Blog/News

Wage Increase Riles LA Garmentos

Sadie Keljikian, Top Billion Finance

Los Angeles, one of the country’s primary garment manufacturing centers, is bracing for the impending hike in the city’s minimum wage. The new law, which will increase the city’s minimum wage to $15 an hour by 2020, will be enacted in stages, beginning with an increase in the lowest pay rate from the current $9 an hour to $10.50, next July.

LA garment factory workers’ base salaries are varied. Companies like 5 Thread, pay employees a relatively low base salary, but give incentive pay based on productivity. As a result, some of its employees already make $15 an hour or more.

5 Thread CEO Brian Zuckerman laments that he will have to move his operations out of the city once the wage increase goes into effect.  In the interim, he plans to place a hiring freeze on low-skilled workers who require on-the-job training.

Other companies plan to say put and, instead, tweak their economic model to accommodate the increased labor costs.  Tianello, Inc., for instance, plans to move into high-margin, labor-intensive luxury products, which are profitable, even when produced in lower volumes.

Despite strong opposition from many in the industry, Los Angeles Mayor Eric Garcetti (D), who fought for the increase, maintains that “there is no question there is going to be some job displacement, but there is going to be net job growth and, most importantly, poverty alleviation.”  A study conducted this March by University of California-Berkeley economists concur with the Mayor’s assignment, finding that 600,000 workers will benefit from new law and less than 3,500 jobs lost.


Sri Lanka to Host South Asian Textile Trade Fair

Sadie Keljikian, Top Billion Finance

South Asia’s one and only International Textiles Trade Fair, Intex South Asia, will be held at Sri Lanka Exhibition & Convention Center (SLECC) in Colombo this November.

In recent years, the garment industry has begun to shift its focus from China to South Asia. Sri Lanka is known as the producer of “Garments without Guilt,” for its reputation of producing high quality and eco-friendly products. As a result, Sri Lanka has become one of the premier garment and apparel outsourcing hubs and continues to grow, with increasing imports of fabric, clothing accessories and yarn from around the world.

Sri Lankan exhibitors will have the opportunity to strengthen relationships with local buyers in Sri Lanka, as well as interact with and access buyers from India, Bangladesh and the rest of the world.

Sri Lanka was chosen to host the fair not only due to its recent success in the garment industry, but because of its politically neutral status in the region.


RGT Italia Holds Clothing Sustainability Workshop

Sadie Keljikian, Top Billion Finance, Inc.

RGT Italia recently organized a workshop entitled, “Sustainability and Product Development,” in an effort to encourage environmentally conscious practices in garment manufacturing. RGT, a Padua-based subsidiary of the German manufacturing group Bock & Partner, hosted approximately 70 representatives from Italian and German fashion and sportswear makers including Hugo Boss, Marc’O Polo, and René Lezard.

The workshop touched on all aspects of the garment manufacturing process with discussions on topics ranging from fashion schools to fabric manufacturers, chemical substance producers and sewing yarn makers.

The event was particularly well-timed given European manufacturers scramble to updated their eco-policies in light of the recent Volkswagen scandal.

Dietrich Bock, CEO of Bock & Partner, was satisfied with the response to the workshop, saying “I’m sure that product managers and designers who participated in the event could get a wider perspective about what sustainability, renewability and eco-friendly production processes mean. And we are ready to face all future challenges.”