The Sock Industry In Fort Payne

Just before I got home this evening NPR was running a story highlighting the decline of the sock production industry in Fort Payne, Alabama and how it has impacted the region. I didn't get to hear it all, but the story as well as the podcast is up on NPR web site.

There were several interesting aspects to this story of how a major portion of the sock production was exported to Honduras (and other Central American countries). I had never realized just how mechanized the sock industry is, but I was amazed to find that the major labor involved, manually closing the toe, has been outsourced to 3rd world countries based on as little as 1¢ cost differential per sock! Some excerpts:

There were more than 150 sock factories, churning out a big chunk of the socks worn in the U.S. But lately, there has been a flood of cheaper socks coming in from China, Pakistan and Honduras. It has devastated Fort Payne. Two-thirds of the town's sock mills have closed.

[snip]

Sock workers are paid per sock, rather than an hourly wage. They generally make 22 to 30 cents for every dozen pairs of socks they sew. In Honduras or China, it's a penny per sock cheaper to sew a toe closed than in the U.S.]

Here's where it gets interesting. The bill to pass CAFTA was deadlocked with Robert Aderholt, Fort Payne's representative, being the swing vote.

Bush met with Fort Payne's congressman, Robert Aderholt, to talk about tariffs and the sock business.

That meeting was, most likely, the moment Aderholt had more power than at any other time in his life. The House was voting on CAFTA, the Central America Free Trade Agreement. The vote was an exact tie. Aderholt was the holdout. And President Bush very much wanted CAFTA to pass. So, Aderholt offered the president a deal: He could get his big free-trade deal only if he rolled back free trade on one industry, the sock industry.

"I told him this was what I needed," Aderholt said. "This was the one thing I had great concerns about."

That night, President Bush agreed to Aderholt's deal. CAFTA passed. And the White House gave itself a self-imposed deadline of Dec.19, 2007, to put back tariffs on sock exports from Honduras.

What do you suppose happened? According to the NPR piece Fort Payne is not doing badly and new industries have taken up where the sock factories left off when they closed. Color me skeptical that the workers who lost their jobs are doing better, but the bright side to the story is that the citizens of Fort Payne have learned the value of education and seem to be aggressive in its pursuit!

I was struck this morning by a story in the N.Y. Times about outsourcing the purchase of manhole covers to India. I have a difficult time understanding the concept of worldwide prosperity predicated on cheap labor! There seem to be only a few winners and billions of losers based on this concept!

I hope that Aderholt's constituents will hold his feet to the fire on the sock tariff agreed to between he and George Bush, but I shall not hold my breath!