Shawshanked: American Apparel Manufacturing Faces Competition From Prisons

After two decades, Unionwear union-made hats finally figured out how to successfully compete with forced labor in China. Now we find out we may have to compete with prison labor in the USA?

bld048487UNICOR Federal Prison Industries (“FPI”) Must Not be Allowed to Produce Baseball Caps

A decision by the FPI Board of Directors to allow FPI to produce baseball caps will destroy jobs and decimate a returning industry that is once again becoming competitive with imports.

This negative impact will far outweigh any possible benefits of FPI expanding into baseball caps.

If FPI is allowed to manufacture baseball caps, they will become a mandatory source for Federal Government work, which subsequently would no longer come up for competitive bidding. This would remove the lion’s share of work from this industry, resulting in thousands of productive employees joining the growing ranks of our country’s unemployed. And for what purpose? So prisoners can learn a trade to use upon their release? There will be no industry left to use these skills in, and the skills used to manufacture baseball caps are not transferable to the other sewing jobs, which are extremely scarce to begin with.

The domestic baseball cap industry is composed of a few dozen factories, each with 50 to 250 employees. There is not a domestic baseball cap factory out there that does not do business with the US Federal Government. This is because out of all textile products, baseball caps (because of their small size, cheap materials, and complicated construction) have the highest percentage of labor costs vis a vis materials costs.

As a result, baseball cap manufacturing has moved to where labor is the cheapest: not the USA. The factories that survive do so as suppliers to the US Federal Government and its dedication to maintaining a domestic industrial base.

Domestic Manufacturing Faces Prison Competition

Prison manufacturing has advantages over local manufacturing – Even if mandatory sourcing did not apply and FPI had to produce baseball caps competitively, domestic manufacturers could not compete with a factory that did not have to pay:

  • government_owned_by_corporate_interestsRent
  • Minimum Wage
  • Interest
  • Federal and State taxes
  • Social Security
  • Medicare
  • Insurance

or any other expenses that make up 60-70% of the cost of a baseball cap, (not to mention unions, OSHA, the EPA, and the INS).

“Illegal aliens” make up a third of the federal prison population and are eligible to be trained at FPI factories for jobs that await for them in their home countries, yet commercial federal contractors have to comply with the stringent requirements of e-Verify.

How Strong American Manufacturing Contributes to National Security

A healthy domestic baseball cap industry will not survive competition from Federal Prison Industries. The existence of a strong, thriving apparel industry is a matter of national security.

According to the 1991 DoD Report to Congress on the Defense Industrial Base, “National security includes economic security and requires that DoD have an assured and reliable source of supply of defense material in peace time, crisis, and war, in an era of declining budgets and increasing defense markets.” National security was the primary reason for the passage of the Berry Amendment, which requires that DoD procure from domestic manufacturers.

The domestic baseball cap industry’s contribution to national security and soldier protection are far from trivial. Domestic manufacturers make headwear:

  • from camouflage with patterns and coatings proprietary to the US Military
  • from materials designed for extreme heat and extreme cold used exclusively by the US Military
  • using patterns and technology for sun, wind, and chemical protection

What is the likelihood of these technologies and products being developed or advanced by prisoners who learn on the job and are released after a short time? These technologies are developed by experts with decades of experience.

We Should Let the Domestic Hat Manufacturing Industry Have a Chance

The high labor cost nature of baseball caps that drove our industry to manufacture in China is the same reason this industry is actually growing domestically right now. Labor costs in China are skyrocketing, as are shipping costs, and the weak dollar even before the Chinese adjust their currency valuation is making imports more expensive than they were even a year ago.

The domestic textile industry is experiencing a small moment of growth right now, with commercial clients returning to “buy American,” for economic rather than patriotic reasons.

The jobs that will result from this growth, or even the jobs we will not lose if FPI is allowed to use baseball caps, are exactly the kinds of jobs targeted by both political parties in both houses as well as the executive branch in the jobs programs being negotiated in Washington as we speak: semi skilled labor geared toward long term employed in the US manufacturing sector.

Most if not all domestic cap factories are located in disadvantaged areas to enable them to compete for Hub Zone set asides, and all are small businesses.

These are the jobs that we should be protecting. Instead, we may decide to ruin a manufacturing base built on the persistent belief that we have freedom for entrepreneurial creativity.

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