How to Save – and Improve – the Textile Industry

How to Save – and Improve – the Textile Industry
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With an estimated $2.5 trillion in losses and looming uncertainty, the textile industry has been hit hard by the pandemic. But even before COVID-19 swept the nation, clothing manufacturing was in a tough spot. From the 92 million tons of waste it created per year to the violations of human rights it’s committed, the industry was overdue for a change long before the coronavirus outbreak affected its financials. Economic upheaval from the pandemic is a challenge to be sure, but it also presents a unique opportunity to change an industry in desperate need of reform, providing better products for consumers while improving environmental and social outcomes. 

Some criticize capitalism's favorite child for wastefulness and vanity and call for the artificial limiting of this creative activity. Such an approach is outdated and costly, and it completely ignores the fact that the textile industry is an essential sector of the economy, providing jobs to millions and clothing to consumers in the U.S. and abroad. Rather than further restricting this essential industry, we should be giving more freedom to efforts that create sustainable development. 

One thing is clear: over-regulating textiles is an anachronistic practice that does little more than push business to other countries. For example, take the Resource Conservation and Recovery Act (RCRA) of 1976, which aimed to reduce water pollution in the U.S. by introducing penalties for excessive waste. While this legislation seemed to work in the U.S., it didn’t really solve anything; it just shifted pollution to other countries. Businesses avoided the regulation simply by moving production overseas, therefore transferring the harmful externalities to developing countries, and in addition, contributing to global carbon impact and worker exploitation in developing nations.

Instead of regulating these kinds of issues, the government should incentivize innovation. Use the carrot, not the stick.

Industry experts have confirmed that bringing production closer to the consumer could kill two birds with one stone, reducing environmental impacts while meeting the buyer’s demand for ethical production.

Examples of innovative sustainable textile business models include on-demand apparel manufacturing, where an item of clothing is only produced if pre-ordered by a customer. This is less harmful to the environment, and in addition, it’s more predictable in terms of costs. To encourage this kind of innovation, the government should provide tax incentives for companies that practice sustainable or innovative business models. 

The state of New York provides an example of where this policy has been put into effect with marginal success. The state’s government has created “Start-up NY zones” that allow companies to operate tax-free and save more money. The practice has created new jobs across the state, but since the program is exclusive to just a few locations, its impact is limited. The government should encourage new textile startups to innovate by letting them keep more of their money, no matter where in the country the facilities are located.

Another way to help environmentally-friendly fashion companies thrive is to nix sales tax for companies like Poshmark or Rent The Runway that recycle or reuse clothes. Since taxes were paid on original purchases, there is no good reason to charge it again, and eliminating sales tax for eco-friendly companies like these would reduce costs for the consumer, incentivizing sustainable shopping.

Another way of opening the fashion industry to more domestic producers is by reducing regulations on home-made clothing. Roadblocks like certification requirements — for women’s clothing, children’s clothing, and even embroidery — restrict market entry for smaller at-home makers. The motivation behind these barriers is to ensure customers are getting quality products. While this may have made sense years ago when it was hard if not impossible to make sure home clothing makers were producing safe garments and sourcing parts from verified manufacturers, this is no longer an issue. These days, all clothing parts can be tracked to suppliers, because all wholesale suppliers have websites with reviews from their customers. There’s enough information for both the seller and buyer to make an informed decision.

Humans are creative creatures — no matter where the economy is headed, we’ll always need artistic outlets like fashion to express ourselves. So, then, to let this essential sector of the economy flourish, we must have policy change for sustainable business models that create both economic growth and creative opportunity.

Jen Sidorova is a contributor to Young Voices, a public-relations firm assisting young writers, and a policy analyst at the Reason Foundation, a Libertarian think tank. You can find her on Twitter @Jen_Sidorova.

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