NEW YORK — Chinatown’s garment industry has changed dramatically since the Sept. 11 attacks that altered the perception of what it’s like to work in the city.
This story first appeared in the September 11, 2002 issue of WWD. Subscribe Today.
The neighborhood’s workforce is much smaller than it was, but some contractors that were closed for weeks or months after the attacks — a period when much of Chinatown was enclosed in a National Guard-enforced security cordon — have since reopened. The woes of Chinatown’s garment workers, as well as those who lost their jobs in stores and restaurants, have also attracted the attention of local government officials, creating the hope that some of the steps they are taking to preserve the industry will help stop the erosion of Manhattan manufacturing that was well under way before the destruction of the World Trade Center.
Contractors are more vigorously pursuing uniform orders, a business that shows promise after the passage of laws in New York State and New Jersey this year encouraging government agencies to buy from local contractors. City officials are seeking to have Chinatown, as well as Little Italy and the Lower East Side, rolled into a state program that would allow new businesses to operate almost tax free and give significant tax breaks to companies that hire additional workers.
David Dyssegaard Kallick, a senior fellow at the Fiscal Policy Institute, a New York-based think tank, said the attacks have given local government an impetus to consider the value of Chinatown’s garment jobs to the city’s economy. His group estimates that every $1 million in manufacturing sales in New York generates 14 local jobs. The institute estimated 2001 apparel production in New York City at $5 billion.
“The city has not had a focused policy on manufacturing in Chinatown and I think there’s a tremendous amount of pressure on real estate in Chinatown,” he said. “So there’s a big question about what’s going to happen. What would be appropriate would be for the city to have a consistent economic development policy that recognized that manufacturing jobs can be good jobs, especially for people that may not have as many opportunities in other parts of the labor market.”
Agnes Wong is among the shrinking number of Chinatown garment workers who still have jobs in the industry.
The morning of the attacks, she was across the East River in Brooklyn, teaching a class to UNITE members. On Sept. 12, like many Americans trying to live their normal lives, she got up in the morning and headed off to her job.
“The subway wasn’t going all the way, so I had to get off and walk,” she said in a recent interview. “The smell made my stomach sick.”
When she got to the Mott Street factory where she worked, she found the doors still locked, as they would be for the next couple of weeks. But when the security cordon that blocked off most of Lower Manhattan moved south of her workplace, the factory, which she did not name, reopened and Wong returned to her daily tasks.
The pressure of her job has intensified, Wong said.
“The quantity [of orders] is very small. It comes really fast and must go fast,” she said, explaining that most orders at her plant need to be turned in two to three days. “If you can’t do it that quick, you won’t get orders from the big companies.”
The number of orders coming in these days is fewer, which means Wong and her co-workers are needed less often and paid less than they used to be.
“A big change is in the salary,” said Wong, who emigrated from Hong Kong in 1974. “You used to be able to make $30 to $40 a day. Now you get $20 to $30 a day and sometimes you work a half day and get less than $20.”
Working for half the salary they earned before the attacks might seem appealing to the estimated thousands of Chinatown garment workers who have since lost their jobs. While there are no precise records available as to how many were laid off in the past year, sources estimated that as many as half of the neighborhood’s garment contractors have closed.
An April study released by the Asian American Federation of New York found that at least 40 of the neighborhood’s 246 garment factories, which had employed 13,808 workers, closed in the first few months after the attacks. Shao Chee Sim, director of research at the federation, said the group is working on an updated report on the economic fallout, and added, “I can tell you there have been additional shops closed.”
Teddy Lai, executive director of the Greater Blouse, Skirt & Undergarment Association, a group of Chinatown contractors, said his group found in a June study that only 137 of the 246 contractors remained in operation.
“Almost half have closed,” he said. Given that the typical Chinatown contractor employs about 50 workers, he reasoned, that could mean more than 5,000 garment workers have lost their jobs since the attacks.
That would represent a major chunk of the total job losses downtown. The city said in its petition to the state to have the neighborhood declared an Empire Zone, which would provide tax benefits to new businesses, that 15,000 jobs have been lost in Chinatown, Little Italy and the Lower East Side since the attacks.
“Chinatown has sometimes been called the economic Ground Zero of Sept. 11,” said Kallick of the Fiscal Policy Institute. “One out of four jobs has been lost there.”
Chinatown’s restaurants and retailers, which include a sizable jewelry trade, have also been hit hard. The federation’s April report said 7,685 Chinatown workers from all industries, representing 23 percent of the neighborhood’s total employment base, lost their jobs in the first three months after the attacks.
That does not come as news to Duen Yee Lam, who worked in Chinatown factories for 20 years after emigrating from Hong Kong and lost her job at a factory at the intersection of Canal and Lafayette Streets after the attacks.
“One week after 9/11, the shop closed for good,” she said through an interpreter in a recent interview at the Centre Street offices shared by UNITE Local 2325 and the Garment Industry Development Corp., where Wong was also interviewed. “I worked in the industry 20 years and it’s very hard for me to start another kind of job. For many other immigrants like me, who don’t have an ability to speak English, it’s very hard to find a job.”
John Lam, chairman of John Lam Fashion Group, a large Chinatown contractor, said he has cut his staff from 1,500 workers to 800 in the past year.
“After the attacks, for two months in Chinatown, there was basically no business. Now it’s starting to pick up a little bit, but in the garment business, it’s still not good,” he said. “Some buyers are still afraid to come to New York. They want us to go see them.”
While domestic apparel manufacturing has been in decline for years, the rate of job loss in Chinatown has accelerated dramatically since the attacks and has far outstripped job losses in other areas of the city. According to the New York State Labor Department, total apparel manufacturing employment in the city stood at 49,500 at the end of July, down from 51,300 a year earlier.
In the garment district, the other major apparel manufacturing neighborhood in Manhattan, the fallout of the attacks hasn’t had “that big of an impact” on employment, according to Daniel Maio, a surveyor for Identity Map Co., which tracks employment in the area for the Fashion Center Business Improvement District.
Sources also noted that the summer months are typically a busy season for Chinatown’s apparel manufacturers, as they finish up fall orders. That raises the question of whether there will be more cutbacks in the fall, unless retail buying is stronger than expected and contractors land the quick-turn, fill-in orders that are a key part of the neighborhood’s apparel business.
During the surge of patriotism that followed the attacks, there had been hopes that Americans would be more inclined to buy clothing made domestically, even if it wasn’t as cheap as that made in overseas factories. UNITE and local manufacturers last fall kicked off a Proudly Made in New York campaign intended to promote domestic buying.
Local contractors said the emotional reactions to the attacks hasn’t had much, if any, influence on shoppers’ and buyers’ choices.
“When we started this company, we labeled the goods ‘Made in New York.’ We continue to label it ‘Made in New York.’ But the reality is people choose on product and price,” said Deidre Quinn, president of Lafayette 148 New York, a division of the Made In New York Group Inc., which makes sportswear and military uniforms in Chinatown. “It’s all bottom line. We get bids asking us to compete with Third World production. We’re given a price…the problem is we can’t do it for the price.”
Price pressures have withered the company’s private label business, which once brought in $8 million in sales, to almost nothing, Quinn said.
“The orders were there, but you can’t take them if you’re going to lose money,” she said.
Quinn said she believes price pressures will continue to squeeze apparel manufacturers out of the neighborhood.
“When the economy is so difficult, it’s hard to be competitive, and it’s very hard to be competitive with Made in the USA, let alone Made in New York,” she said.
In the past few years, the company has moved its cutting, warehousing and shipping operations into the Sunset Park section of Brooklyn. Measured by square footage, its operations are now divided 50-50 between that location and Chinatown, Quinn said. About 300 of the company’s workers report to the Chinatown location, while about 65 work in Brooklyn.
The company has also opened a factory in China, where it performs labor-intensive processes like beading.
As the leases on the floors it occupies at 148 Lafayette Street come up, she added, the company will likely give up more space in Manhattan. She projected that eventually, 80 percent of the company’s space will be in Brooklyn.
“As the rents go up, it’s just going to be harder to stay,” she said. But she said the attacks also opened her eyes to the dangers of not spreading a business over multiple locations.
“I’m glad we’re moving some of the people to Brooklyn,” she said. “I don’t want everything in one location.”
Through the boom years of the late Nineties and 2000, rising rents were a major issue for Chinatown manufacturers. As nearby neighborhoods — including TriBeCa, NoLIta and SoHo — went upscale, Chinatown landlords sought to increase their charges and fill their manufacturing buildings with dot-coms and other white-collar businesses, in what amounted to a commercial real estate version of gentrification.
After the slowdown in the stock market, the dot-com collapse and the attacks, those pressures have eased.
“Before, they did have lease problems,” Lam said of his fellow manufacturers. “After Sept. 11, that problem is basically gone.”
The easing of the rent crunch may be a temporary phenomenon, though, sources cautioned.
“The landlords are not giving long leases,” said Paul Lau, executive director of the Sportswear Apparel Association, another Chinatown contractors’ group. “They give you only a one- or two-year lease for manufacturing. They’re not going to give you a long-term lease.”
That could mean another exodus of manufacturing from Chinatown in the next year or two, as the downtown real estate market continues.
Residential rent issues are also affecting the neighborhood’s low-income workers. Residential landlords are looking to renovate their buildings to attract higher-income tenants and are doing what they can to drive out low-income immigrant workers, particularly those who are living in illegally subdivided apartments. Contractors said more of their employees are living outside Chinatown these days.
With the fashion industry’s focus on keeping prices low driving more production overseas, contractors said they’re stepping up efforts to secure uniform orders from the government. They’ve been aided in that effort by a New Jersey law passed this year requiring all uniforms and other apparel purchased by the state be made in the U.S., and by a New York State law that gives preferential treatment to contractors affected by the Sept. 11 attacks who bid for state uniform contracts.
“I’m trying to push for more uniform business,” Lam said.
Many of the neighborhood’s manufacturers have also received grants from the federal government and private charities — including $1 million the U.S. Labor Department earmarked in December for the neighborhood — intended to help them through the first months after the attacks. But Lam said the neighborhood’s businesses and residents need more than one-time grants.
“To give money away is only thinking short term. People need to have a job in the long run,” he said. “New York is an immigrant city and this is the only business that many immigrants can find a job in. Without the garment industry, it will be difficult for immigrants to make a living.”
Chinatown may get the sort of long-term program to encourage business development Lam was talking about if the state approves the city’s request to include Chinatown, Little Italy and the Lower East Side among the six new Empire Zones it intends to designate this fall.
The Empire Zone program is intended to allow new businesses to operate in an essentially tax-free environment for their first 10 years in operations. It also grants tax breaks to companies that add employees or invest in new facilities.
“Historically, the garment industry has always been a part of Chinatown,” said Robert Walsh, commissioner of the New York City Department of Business Services, whose office was instrumental in preparing the application for the neighborhood — the only application the city has filed. “It needs to continue to be a part of Chinatown and we need to do everything we can to, one, help the existing businesses that are there, and then my hope when we get an Empire Zone in place would be that we can turn the heads of some people in that business to come back and grow again.”
While the Empire Zone benefits include a complicated system of tax credits and exemptions, Walsh said his office would try to make the benefits clear, if the state grants them. Chinatown’s application is one of more than 25 the state expected to receive. The state plans to make its decisions this fall.
“One of the things I want to do is I want to get a format so we can understand what all this actually means,” Walsh said. “If you’re a million-dollar business, and you add 20 people, what does that mean for you?”
Observers noted the city in recent years has not had many programs in place targeted at retaining apparel-manufacturing jobs in Chinatown. An Empire Zone designation could change that.
Lam said he believed the general negative public perception of apparel manufacturing has held back the government from doing more to help local manufacturers.
“Most of the government people are afraid to go near the garment factories because there are too many minor problems in the garment industry,” he said. “They don’t know which are good factories and which are bad factories.”
Still, he said that government support will be critical to preserving the neighborhood’s manufacturing base.
“Without any help, it will continue to decline,” he said. “It’s a very sad story. New York is the biggest fashion capital in the world and we can’t keep production here.”