A Coat of Many Colors: Immigration, Globalization, and Reform in New York City's Garment Industry

Chapter 2: The Globalization of New York’s Garment Industry

2 The Globalization of New York’s Garment Industry Florence Palpacuer T he New York garment industry brings together a highly diverse set of people, firms, and activities. It includes small concerns rooted in the new immigrant communities of the city, along with large firms, such as Liz Claiborne and Polo Ralph Lauren, expanding on international markets. The former predominantly employ women immigrant workers to perform traditional, labor-intensive manufacturing activities , while the latter use sophisticated information technologies to design and market their products but do not own any production facilities. This contrasting landscape can be seen as a miniaturized version of the global apparel industry, in which manufacturing has become increasingly dispersed to factories located in newly industrialized and developing countries , while product development, branding, and retailing activities are predominantly performed by large firms in developed countries. The coordination or ‘‘functional integration’’ of complementary activities across locations constitutes a distinctive feature of globalization in contemporary capitalism.1 In industries such as apparel, electronics, and automobiles, it has led to the emergence of ‘‘global value chains’’ governed by large leading firms that arrange for the manufacturing of their products through complex transnational networks. In such chains today, a garment might be designed in New York, produced from a fabric made in South Korea, spread and cut in Hong Kong, assembled in China, and eventually distributed in Canada. From a traditional macroeconomic perspective, 46 A Coat of Many Colors globalization tends to be understood as a rise in international competition that translates into a surge of apparel imports to the American domestic market. By contrast, a value chain perspective shows that globalization involves a transnational reorganization of apparel activities, in which American firms play a diversity of roles. This chapter analyzes the roles played by New York garment firms in the processes of globalization. It seeks to identify the variety of ways in which local firms have contributed, or responded, to globalization, and to assess how their strategies have transformed the structure of the local industry over the last two decades. A value chain perspective will first be used to highlight the dominant organizational characteristics of the global apparel industry. Employment trends in the New York garment industry will then be considered, together with a traditional analysis of New York’s role in the clothing sector. The next three sections will propose a complementary analytical approach that looks at major changes in local firms’ strategies in the 1980s and 1990s. These include the emergence of global market strategies in terms of brand management, product lines, and retailing , new production management strategies involving the development of global subcontracting networks, and manufacturing strategies implemented by local producers. This overview of local firms will highlight the heterogeneity of their positions and roles in the global apparel industry. Some of these firms actively contributed to the processes of globalization and others managed to build a niche for themselves in the global industry, while many failed to adapt to, or barely survive in, this new environment. Such analysis thus identifies winners and losers in the processes by which the New York garment industry became integrated within global apparel networks. Overall, these processes allowed for the international expansion of New York brands and design innovations but also contributed to firms’ failures, and to massive job losses at the local level. Organizational Patterns in the Global Apparel Industry The global value chain perspective seeks to explain the dynamics of international trade, production, and employment within an industry by highlighting the organizational mechanisms by which complementary activities are coordinated across locations. Building on Gary Gereffi’s conceptual framework, four dimensions can be distinguished to characterize a global value chain.2 They include: The Globalization of New York’s Garment Industry 47 its input-output structure, or sequence of interrelated value-adding activities, including product design, manufacturing, logistics, marketing, and sales, its governance structure, or power relations within and between firms that determine how financial, material, and human resources are allocated and flow within the chain, its geographical configuration, referring to the spatial dispersion or concentration of activities across locations, and its social and institutional context, formed by the norms, values, and regulatory and policy frameworks of the communities within which firms operate. The governance structure plays a key role in the distribution of activities and profits among firms operating in the apparel value chain. It involves close network relationships, where lead firms are engaged...