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ILGWU Pact Raising Industry Ire

NEW YORK -- The ILGWU's new labor contract, approved so far by six of the industry's 45 trade associations, is drawing fire.<BR><BR>With the current contract expiring at midnight tonight, the largest associations that have yet to sign are the New York...

NEW YORK — The ILGWU’s new labor contract, approved so far by six of the industry’s 45 trade associations, is drawing fire.

With the current contract expiring at midnight tonight, the largest associations that have yet to sign are the New York Skirt and Sportswear Association, whose membership employs an estimated 15,000 workers, and the Greater Blouse, Skirt & Undergarment Association, whose members employ some 25,000 people.

Industry executives feel the union has gone too far in its demands, and say it’s going to further erode the New York manufacturing base, which in 20 years has fallen from 400,000 garment workers to 90,000.

As reported, the union and trade groups representing coat, suit, dress, rainwear and children’s manufacturers reached an accord last week on a new three-year contract.

The industry has not had a general strike since 1958 and there has been little indication from either labor or management that there will be one this time. Historically, the ILGWU has reached similar terms with all associations. Still, the unsigned trade groups have expressed resistance to the terms agreed upon last week.

Eli Elias, president of the skirt and sportswear association, said his organization and the union are far apart and cannot agree to the same terms signed last week by the six associations.

Paul Lau, general manager of Greater Blouse, said his group is making modest progress in negotiations, but there are still “some major obstacles.”

The deal calls for a 10 percent wage increase over three years, and a hike in the employer’s contributions to the union’s health and welfare fund from the current 7.5 percent of payroll to 9 percent on July 1, 1995 and to 9.5 percent on July 1, 1996. In addition, employers will contribute another 0.5 percent, effective July 1, 1997, to the union’s health services plan, which provides prescription drug coverage.

The last contract, negotiated in 1991, saw wage increases of 4 percent a year for three years, and contributions to the medical plan rise a total of 1.5 percent over three years.

While some management groups have agreed to the wage and benefit package, others are still trying to hammer out a deal.

Elias noted that 67 percent of all apparel sold in the U.S. last year was imported, and that only 8 to 9 percent was made in union shops. Elias said he’s witnessed the industry change drastically over the last quarter century from one that was dominated by union shops and U.S.-made goods to one where domestic manufacturers are the rare breed and labels like “Made in China” pervade the stores.

“No matter what we do, I guarantee the great number of our members will not be in business when it’s time to negotiate the next contract,” said Elias, adding that the union is more concerned with getting higher wages for its workers and getting management to pay more for health and welfare than it is about sustaining the industry.

“The cost of living rose 1.3 percent last year, and they want a 4 percent increase this year,” he said. “They are driving themselves right out of existence.”

Lau talked about the growing threat of imports.

“We would like to take a tougher stance with the union, but we are the employers of 25,000 workers who work and live in the Chinatown community, and we have to consider their best interests as well,” Lau said. “We have global issues to deal with today, with tough competition from imports. The future looks bleak for our workers and contractors. I’m afraid in the future they will either go out of business or become non-union shops.”

Jay Mazur, president of the ILGWU, said talks are ongoing in hopes of reaching an agreement by tonight’s deadline.

“We hope the agreement reached with the six trade associations will act as a pattern for settlements with the other associations,” Mazur said.

Jon Levy, president of The Gillian Group, a large unionized dress and suit maker said “any increase has to have a negative impact at this time.”

“This is not the appropriate time for the union to look for increases from manufacturers,” Levy said. “We’ve all had to decrease our gross margins to offer the consumer better value. Maybe if the economy really picked up and business was booming, I could see them asking for more money, but this is the wrong time to do that.”

Levy said the union is only going to force many companies to import because the price of manufacturing here has become too high.

“The union’s approach appears to be very shortsighted,” Levy said. “It’s a shame because it’s important for companies like mine to manufacture domestically because it does offer advantages such as better quality control and faster production cycles, but they’ve really gone too far. The union is negatively impacting domestic manufacturing when it should be trying to do just the opposite.”

One coat manufacturer, speaking on condition of anonymity, said the agreement is not good for the health of domestic apparel making.

“The union health and welfare fund is in dire straits, and the only place the union can get the money is from the manufacturers,” the unionized vendor said. “The ILGWU is in a Catch 22. The reality is that there are empty shops everywhere where work has gone overseas, so there is less work for the union’s workers and less money coming in to the union. Yet, the union needs to justify itself by getting increases for its workers.”

Another manufacturer said government at all levels — from city to federal — is as much to blame as the union for the downward spiral of domestic production because there are no incentives to keep production at home.

“We give all this support and incentives to Third World countries,” the manufacturer said. “The government seems willing to let apparel manufacturing in this country die, and they are going to succeed unless something is done.”

On the other hand, there are some industry executives who seem less disturbed by the new contract.

Howard Bloom, president of Chetta B, who was part of the negotiating committee for the Amalgamated Dress Manufacturers, said, “It was a hard fought battle, but I thought it was fair in the end. It’s not going to have a drastic effect. Everybody is going to have to pay a little more and I’m going to have to charge a little more. I’m not thrilled about it, but I’ve learned to live with it.”

Bloom said those makers that are turning to imports are going to do it regardless of the new increases, but makers like him, who “only do domestic manufacturing,” will continue to do so.

Defending the union’s position, Mazur said the wage and health care increases “will not overburden the manufacturers.” He said these are “low-wage workers,” who cannot go without an increase that at least matches inflation.

“If the employers went out and tried to get health insurance on their own for their workers, they would have to pay 18 to 25 percent of wages, which is much less than we are asking them to pay,” Mazur said. “This agreement will not put anybody out of business. What’s hurting the workers and the businesses is health insurance, and we hope a bill will be passed that will offer some relief. We would also like to see some curb put on imports, but that doesn’t seem likely.”