Since I've been wearing the same dozen or so T-shirts for the majority of my college career, I thought it might be time to change my wardrobe a bit before coming back to school this year. Luckily my brand of choice was easy. I chose American Apparel, which caters to the anti-sweatshop, corporate-responsibility crowd and the I-want-to-look-good crowd. To the first I pledge my allegiance; to the latter I quietly admit my belonging.
In August, I visited American Apparel founder Dov Charney's sunny house in Echo Park, Los Angeles, and found it full of white walls and cultural knick-knacks you might find at any hipster's home. It is rather small, but has no shortage of books. His shelves are an interesting mix of generally three genres. Choosing randomly, you may pick up a hardcore, kill-your-competition capitalist bible. Or what is in your hand could be a counter-culture, subversive, anti-commercialism book waiting to be banned. Finally, you may find yourself looking at "The Racy Pin-ups of World War II" or another such artsy, moment-in-culture book. These influences have melded in Charney's brain and contributed to the formation of a new kind of company.
American Apparel sewers earn an average of $13 per hour. Their lunches and their transportation to and from work are subsidized. For $8 per week, they can get into the generous company health care plan and qualify for paid vacations; for $3 per week, their children get health insurance.
The company provides ESL classes for immigrant employees. There are four masseuses working to ease cramps. There is free Internet access for employees. The next step is to open factories overseas - but intending to provide for local consumption and paying U.S. minimum wage.
Is it really that good? The 2,000 people on a waiting list for employment believe so.
Defying conventional economic wisdom, American Apparel has also doubled its profits for three years in a row, and may again this year, to $160 million. It has opened retail stores around the world, and sales from AmericanApparel.net maintain high growth (which is where you should go to buy yours).
The model works because ensuring that employees are happy and healthy, in turn, makes them more productive, reduces absenteeism and slashes turnover and training costs to almost nothing. The savings in these areas far outweighs the increased labor costs.
AmericanApparel's success may be a signal that exploitation-based capitalism can finally be overcome by a more personable and profitable non-zero-sum capitalism, where companies see their employees as lifeblood rather than prey.
How else can this be good? Well, when poor people with legitimate economic needs (not wants) are better paid and cared for, they can use their extra income to purchase needed items, increasing capital and profits at all levels of society. They could also use it to send their children to college, increasing society's human capital and, via family ties, low-income access to it. Demand-side economics has been ignored for too long, out-voiced by the wealthy proponents of now-debunked supply-side economics.
But back to the company that might be starting the revolution to demand-side. Believe it or not, American Apparel is doing it fashionably. Their clothes are sharp-fitting, colorful, and comfortable, made from high-quality (and organic) cotton. Their ads, one of which features topless women, are edgy and sexy. But they also feature their employees and the elderly, a testament to the company's ethos that all people possess a beauty and dignity worthy of acknowledgment.
As Charney states, "I don't think there's anything sexy about a girl in Vietnam sewing clothes for 10 cents per hour," but that is what you're buying when shopping anywhere else.
Charney's "compania rebelde" has been around for over five years, and it is too early to say if it can maintain its revolutionary status. As the company expands, will it be able to maintain the level of vertical integration that Charney credits part of his success to? Will globalized T-shirt giants steal his designs and flood the market with equally fashionable T-shirts that are cheaper thanks to sweatshop labor?
I don't know the answers to these questions - only time will answer them. For now, though, the whole world can buy clothes they can feel good about and look good in without going broke. And that's an entirely unique combination.
Rob Sand '05.5 wears a shirt only when he has to.
