A significant number of L.A.-based sewing factories are ready to leave the city to settle in Las Vegas. The Korean American Fashion Association in Las Vegas (KAFA) has already confirmed that five factories have recently relocated as the number is expected to reach 50 by the end of this year.
“There are now 15 Korean sewing factories in Las Vegas,” said KAFA chairman Yong-soon Lim. “Since the end of last year, there have been increasing inquiries about operating a factory here.”
The KAFA was founded last April by 10 Korean sewing factory owners to create a free flow of information for those who were interested in relocating to Las Vegas. Lim, the organization’s second chairman, has been playing an integral role in helping Korean businesses to settle after their respective relocation.
Las Vegas, Nevada and El Paso, Texas have always been preferred destinations for Korean sewing factories in L.A. in recent years. However, Las Vegas seems to have been the go-to place for most factories. Even though the minimum wage in Texas remains lower at $7.25 per hour, the cheaper cost of other factors such as workers’ compensation and utility, as well as Las Vegas’ proximity to L.A. is starting to give it an edge.
For example, workers’ compensation in Las Vegas is about 10 percent less expensive compared to L.A. “Businesses now feel that Las Vegas gives them a much bigger advantage from a financial standpoint,” Lim said.
Even the prominent clothing businesses in L.A., including Ambiance and Julia, are contacting factories in Las Vegas for manufacturing. Lim added that other factories have also visited Las Vegas in recent months to explore business possibilities.
“Many Korean factories have been highly concerned by L.A.’s rigid labor law,” said former KAFA chairman Phillip Kim. “For the factories that have already relocated to Las Vegas, not having to worry about workers’ compensation has certainly been a burden off of their shoulders.”
Relocating to Las Vegas has also given the factories the luxury of operating in larger spaces. Many of the factories, which have been smaller than 5,000 square feet in L.A., now have working spaces of 10,000 square feet in their new locations.
“Setting up a factory in a space that’s larger than 10,000 square feet is one of the main factors behind increasing relocation of the factories from L.A.,” said Las Vegas Key Realty president Jae-sung Lim.
However, even though a factory space of 10,000 square feet is enough to provide jobs to 80 employees, many businesses still remain understaffed, according to industry experts.
Unlike a big city like L.A., Las Vegas does not provide enough competent employees. As finding housing in Las Vegas is more challenging, outsourcing a trained employees is even more difficult.
Meanwhile, there is only one remaining Korean-owned sewing factory in El Paso. Even though the factory has been sustainable, other factories that have moved into the city from L.A. have closed down amid financial struggles.
By Moon Ho Kim