According to industry sources, as much as 100 businesses with at least 50 based in Los Angeles are considering a move to El Paso, Texas. Most of these businesses compose the jobber’s market of Downtown fashion district. It seems that El Paso might eventually become the next home of the Korean American apparel industry.
Early this month, a group of local organizations composed of Korean American apparel manufacturers, garments and textiles reportedly came to an agreement to find a more effective solution for the Korean American clothing industry. These businesses make up at least a third of the fashion district. Korean-owned apparel-related businesses form the center of a local web of banks, realtors and restaurants that compose one of the cities’ most concentrated industries.
The Korean American Garment Industry Association (KAGIA) stated that it would lead the efforts to begin the move. Recent federal raids involving money laundering have driven away customers. Last year, the jobber’s market was surprised when the federal raid turned the district upside down to uncover millions of dollars of laundered money. The jobber’s market has suffered from downsizing in the last 20 years from 104,000 jobs to 45,600 because many manufacturers have moved to countries with cheaper labor.
There are also plans to raise the state minimum wage to $10 an hour. The apparel manufacturers are looking forward to relocate to El Paso because it has a skilled labor force with looser labor enforcement and no state income tax.
Lee Jung-soo, the president of KAGIA vows to support apparel businesses that are looking for a better production environment through relocation. According to KAGIA at least 7 businesses have already made the decision to move. The rest of the businesses in the Downtown fashion district are expected to relocate their factories the soonest time possible before the minimum wage rate is increased to $10 an hour for the coming year.
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