Last updated on August 6, 2022
In fall 2021, California’s governor Gavin Newsom signed on SB62. This protects against wage theft and requires factories to pay their workers by the hour, instead of by the piece. The FABRIC Act, introduced by New York senator Kirsten Gillibrand, looks to extend California’s anti-wage theft laws on a national level. On May 12th, the bill went up to the Senate to be reviewed, where it was then referred to the Committee on Finance. If passed, the FABRIC act would mark the first time change regarding the fashion industry has been implicated at a federal level.
The garment industry is subject to a complex supply chain. One which is often exploited to dodge labor laws through extensive subcontracted work. The FABRIC Act hopes to extend the Fair Labor Standards Act of 1938 to end the practice of paying workers for pieces manufactured. This common method can result in workers being paid as little as 2 to 6 cents per piece manufactured. A price far below the legal minimum wage. If FABRIC passes, brands will be held accountable. And become required to pay their employees a minimum wage of $7.25 an hour. This will occur even in factories they don’t own.
Furthermore, FABRIC also contains a domestic garment manufacturing support program. The Department of Labor will administer it, being worth 40 million dollars. This program is targeted toward companies looking to update their facilities to improve working conditions. Because working conditions can often be unsafe, cramped, dirty, and poorly ventilated.
Many companies and labor organizations stood behind the passage of SB62. And many more are proud supporters of FABRIC. The act has a total of 127 endorsers as of July 22, 2022, and is always looking for additional organizations willing to support the cause of providing “Good Jobs with Dignity.”
Not all brands are enthusiastic about the passage of such laws. For example, when SB62 was passed, the California Chamber of Commerce, a major trade group, staunchly objected to the bill and its implications. According to the Chamber’s policy advocate, Ashley Hoffman, the bill placed an undue burden on manufacturers. “I don’t think there’s an appreciation really for the legal liability risk that will be placed on companies,” she noted.
Additionally, the act will also assist brands looking to return to domestic manufacturing. Done through a 30% reshoring tax credit to cover expenses of companies moving their factories to the US. Also while offering tax exemptions and grant programs for brands willing to shift towards US manufacturing. These actions are being taken to combat the rise of outsourcing and offshoring. Which has resulted in a massive decline in profits and jobs for the garment manufacturing industry.
The US’s domestic garment manufacturing industry is currently losing 28.8 billion dollars per year in imports from China. Out of the 40 million garment workers in the world, less than 92,000 reside in the US. In New York’s garment district, a former focal point for the industry, available jobs have plummeted from 26,966 to 4,394 since 2002, according to the Bureau of Labor Statistics.
In the face of modern dilemmas such as the pandemic and the Russia-Ukraine war, global manufacturing has grown more and more complex. The previously prevailing trend of globalization and economic interconnectedness has shown the pitfalls of outsourced labor. The question remains– in a world emerging from an era defined by globalization, how will our economy and our governments respond to the pitfalls of this system? The FABRIC act is a chief exemplar of this query and the US’s response to this bill will set a precedent for the economic era to come.
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