The Slippery Slope: Textile, Apparel Jobs Lose Another 18,200

Apparel and textile manufacturing lost 18,200 seasonally adjusted jobs in July, one of the largest single-month drops in employment on record.

“The time for action is long overdue — no more words, no more commitments,” said Augustine Tantillo, Washington coordinator for the American Manufacturing Trade Action Coalition. “[The administration] should approve the textile industry’s China safeguard petitions, exclude [trade preference levels] from all future trade agreements and back away from their proposal to eliminate all industrial tariffs. If these actions don’t happen, even more jobs will be lost.”

John Mothersole, chief economist with Global Insight, agreed with the industry’s contention that imports from China have led to massive job losses in the U.S.

“Ultimately, it’s the competitiveness of the U.S. cost structure versus low-cost producer overseas, which are generally in East Asia and almost always in China,” said Mothersole, noting that Mexican factory employment is also increasingly coming under pressure because of production relocation to China. “Even a country that has a much lower cost base than the U.S. is suffering.”

Charles McMillion, chief economist at MBG Information Services, said he expected this acceleration in job losses “because of a flood of imports [mainly from China], weakening demand and the low level of capacity utilization.”

McMillion said that’s why the textile industry has proposed the safeguard action against China.

“The textile industry is trying to keep sewing available in Mexico, so that U.S textile plants can supply Mexico or the Caribbean, and even Mexico is getting hammered,” he said.

Meanwhile, the sluggish economy also hit the retail sector, with apparel and accessories stores cutting 1,100 seasonally adjusted jobs from payrolls in the month to employ 1.274 million. Compared with July 2002, apparel and accessories store employment fell by 38,300.

Department stores shed 2,800 jobs in July to employ 1.683 million workers. Compared with July 2002, department stores cut 21,800 from payrolls.

General merchandise stores added 4,000 jobs in July to employ 2.83 million and added 3,400 against a year ago.

In the overall economy, employers slashed a total of 44,000 jobs, even as the U.S. unemployment rate fell in July from 6.4 percent in June to 6.2 percent.

“A declining unemployment rate is always better than a rising rate,” Mothersole said. “But the disturbing part is there was not an increase in jobs. Jobs were shed and the number of workers looking for employment dropped,” which is why the unemployment rate fell.
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