Why America Stopped Making Its Own Clothes

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In 1960, an average American household spent over 10 percent of its income on clothing and shoes - equivalent to roughly $4,000 today. The average person bought fewer than 25 garments each year. And about 95 percent of those clothes were made in the United States.

Fast forward half a century.

Today, the average American household spends less than 3.5 percent of its budget on clothing and shoes - under $1,800. Yet, we buy more clothing than ever before: nearly 20 billion garments a year, close to 70 pieces of clothing per person, or more than one clothing purchase per week.

Oh, and guess how much of that is made in the U.S.: about 2 percent.

Click on the graphic below to see how dramatically the cost and origin of our clothing has changed. And then continue reading to find out why.

How did we get here?

The mid-1970s saw the emergence of large textile mills and factories in China and other developing countries in Asia and Latin America. These operations offered incredibly cheap labor and raw materials, as well as the capacity to quickly manufacture huge orders. By 1980, even though about 70 percent of the clothing Americans bought was still made domestically, a handful of big retail chains like Gap Inc. and J.C. Penney began transitioning away from actually making their own clothes.  Instead, they increasingly just designed and marketed them, but outsourced production factories overseas where the work was done at a tiny fraction of the cost. Meanwhile, the same early adopters began to develop vast global supply chains that allowed them to divide up each step of the production process, sending the work to whichever location offered the cheapest, most efficient services. By 2003, Gap was ordering its clothes from more than 1,200 different factories in 42 countries, according to Elizabeth Cline, author of Overdressed: The Shockingly High Cost of Fast Fashion.

A successive wave of trade liberalization polices in the 1990s, including the North American Free Trade Agreement (NAFTA) in 1994, effectively wiped out most import restrictions and duties on foreign-made clothing. American retailers increasingly looked to suppliers in the Global South for all manufacturing needs.

Not surprisingly, American textile manufactures couldn't compete: between 1990 and 2011, about 750,000 apparel manufacturing jobs in the U.S. disappeared, according to the Bureau of Labor Statistics.  The average U.S. garment worker, among the roughly150,000 who still remain, makes about 38 times the wage of his or her counterpart in Bangladesh, according to Cline.

Today the U.S. apparel market is the largest in the world, comprising about 28 percent of the global total. And hardly any of this clothing comes with a Made in the USA tag.