Garment Contractors Urged to Seek Higher Pay From Retailers

Squeezed by the minimum wage increase, a garment contractors association is encouraging its members to seek higher pay from retailers, saying widespread support for the federal wage hike indicates the public is ready to accept an increase in clothing prices.

The Garment Contractors Assn. of Southern California recently sent letters to its 200 members urging them to appeal to apparel manufacturers and retailers for higher pay. The letter says the minimum wage increase that goes into effect today will eliminate apparel manufacturers’ profits and could create more sweatshops.

The trade group that represents the nation’s largest retailers rejected that argument.

“Consumers won’t pay a higher price,” said Tracy Mullin, head of the Washington-based National Retail Federation. “When you consider the fact [that] retailers often have to put goods on sale and cut prices two or three times to sell [inventory], one doesn’t have to be a brain surgeon to conclude that retailers aren’t going to pay more.”

The rebuff is the latest blow to the contractors, which are squeezed by higher costs and regulatory pressure to root out sweatshop operators who violate wage and safety laws.

Sweatshops are already undercutting legitimate contractors, said Joseph Rodriguez, executive director of the contractors association. He said sweatshops win contracts from manufacturers by offering to sew garments more cheaply. Such low bids are possible, Rodriguez said, because sweatshop operators do not disclose that their workers are paid less than the current minimum wage of $4.25 an hour.

That minimum rate rises to $4.75 effective today . Employers will be required to pay $5.15 per hour beginning in September 1997, the second phase of the hike.

Rodriguez expects four other California contractor groups to send similar messages to their members. The five associations have a membership of nearly 1,500, more than a quarter of all the contractors in the state.

If retailers agreed to an increase commensurate with contractors’ additional wage and benefit obligations, it would increase the average cost of a garment by 4%, Rodriguez said.

“The public favored the minimum wage increase by wide margins, but consumers must be made aware that someone has to pay for it,” he said. “If the public is informed that a price increase is based on the wage increase, consumers would understand.”