What is the primary factor contributing to higher labor costs in the US apparel industry?

The primary factor contributing to higher labor costs in the US apparel industry is minimum wage laws. These laws establish a baseline wage that employers must pay their workers, significantly impacting overall labor expenses for companies in the apparel sector. In the US, many states and cities have implemented minimum wage rates that are higher than the federal level, contributing to increased costs for businesses that need to comply with these standards.

Additionally, the apparel industry typically relies on labor-intensive production processes, meaning that labor costs can represent a significant portion of total manufacturing expenses. When minimum wage laws increase, companies must allocate more resources to meet these requirements, which can lead to higher retail prices for consumers and can affect competitiveness against overseas manufacturers where labor costs may be lower.

While intellectual property standards, material sourcing difficulties, and regulatory requirements can influence the industry in various ways, none of these factors have as direct and pervasive an impact on the overall labor costs as minimum wage laws do.