EL SALVADOR: Fraying of the Textile Industry

Mondays are hiring days at the hulking garment factories
that in the last 15 years helped lift El Salvador up from war and bring
some 90,000 families out of extreme poverty. By 7 a.m., hundreds of
women like Gloria Campos are lined up, hoping to get a tiny piece of

But shifting global trade rules threaten to reverse
El Salvador's industrial revolution. Employment in the garment
industry, until recently a source of growth, declined in 2004 for the
first time in a decade.

The government puts the number of jobs
lost at nearly 6,000. Managers of assembly plants said the number was
almost twice as high. Thousands more jobs will be lost this year, they
predicted, threatening to drive up El Salvador's largest export to the
United States: its people.

Trouble in the garment industry,
brewing for years, has heightened here and in other struggling parts of
Central America, as an end to global textile quotas at the beginning of
the year spreads textile and clothes manufacturing to other parts of
the developing world, particularly China.

But as close and
nimble neighbors of the United States, El Salvador's exporters seemed
to think that buyers in the United States would keep their workers busy
in order to have a fast and easy alternative to Asia. And free trade
agreements promised to buffer the region from outside economic forces.

thinking comforted exporters throughout Central America, where an
estimated 1,000 textile and apparel factories have employed some
500,000 people. But now, with quotas ended, merchants in the United
States and Europe buy where it is cheapest. And here, as in Mexico, the
trade agreements have led to more disappointment than promise.

the biggest-name clothing brands hunt for bargains halfway around the
world, the factories that became the engine of Central America's formal
economy are starting to sputter.

In the first two months of this
year, authorities said, 18 plants in Guatemala, Honduras, Costa Rica
and the Dominican Republic closed; some 10,000 jobs were lost.

with Central America's worst poverty and lowest wages, is the only
country that has had an expansion in its young garment industry.
Textile powerhouses like Guatemala and Honduras, the third-largest
clothing exporter to the United States after China and Mexico, have
managed to maintain a rough stability. But industry representatives
said they expected orders to dry up at many factories by summer.

far, the ending of the quota system - a 1974 pact known formally as the
Multi-Fiber Agreement - has hit hardest in El Salvador. Part of the
reason, industry experts said, was that four years ago, this country
adopted the dollar as its official currency, giving it no leeway from a
devaluation to keep exports competitive. As a result, it has the
highest labor and transportation costs in the region.

Hiring days
put a human face on this grim economics. On a recent Monday, long
employment lines were filled mostly with mothers in tattered skirts and
plastic sandals who had not finished grade school.

These were
not new applicants, but seamstresses with years of experience - women
who spoke as if they had been caught up in some storm that no one told
them was coming. For the last seven years, Ms. Campos, a 42-year-old
mother of three, had worked in the maquiladoras - the local term for
the assembly plants - and the $5 she earned each day was her family's
only income.

Then in December 2003, her employers skipped town
without notice. They told her and the 400 other workers that they were
shutting down the factory for the Christmas holiday. The factory never
reopened, and the company left without paying a penny in severance.

She quickly found work at another garment-making operation. That one
closed in October 2004. Ms. Campos has been standing in lines every

"I come every week with a lot of hope, " she said, "and
every week I go home feeling sad. If I don't find a job soon, I don't
know how I am going to survive."

AMP Section Name:Manufacturing
  • 184 Labor

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