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The American middle class is in distress. Here's what that means to the world's largest economy, and the rest of planet earth.

Manila benefited from the offshoring of garment jobs from the US. But that prosperity has not endured. (Michael Condon/GlobalPost)

America the Gutted: the global garment industry's fleeting hub

The new victims of US outsourcing? Asians who once took Americans’ jobs.

MANILA, Philippines — The collapse of US apparel manufacturing has been good to Fely Curameng, a Filipina peasant-turned-factory boss.

Through windows in her air-conditioned office, she looks out upon of an army of bent backs. A hive of workers on the factory floor hunch over automatic sewing machines. The staccato of needles firing thread into fabric reverberates off cement walls. Each day, incoming bales of cloth are cut and stitched into signature American brands: Dickies, Wrangler, Lee and more.

Curameng, now a coifed 57-year old, was once a poor seamstress. She owes her ascent from the factory floor to the office upstairs to qualities Americans hold dear: hustle, ingenuity and the guts to take risks. But she also owes it to the exodus of blue-collar garment factory jobs from America to foreign shores.

When garment factories fled the US in the mid-1990s, Curameng built them in the Philippines. “Those were my golden years,” she said.

Back then, American CEOs willing to relocate garment work were courted by Filipino politicians, who slashed fees and transformed old US military bases into modernized manufacturing zones. Curameng seized the moment and opened a string of factories churning out American brands on the cheap.

“I had four factories running, 1300 workers, all of them sewing clothes for Americans,” she said. She was so enamored with her success that she named her daughter “Epza,” a nod to the state-run “Export Processing Zone Authority” that enabled her mini-empire. “The Americans were paying so much. $2.50 per shirt. It was wonderful.”

But today, bosses like Curameng, who once thrived on supplanting American labor, have become the new victims of US outsourcing. She and others have learned that US outsourcers are fickle companions. Their wandering eyes have drifted away from the Philippines and towards even poorer Asian nations with super-low minimum wages.

In the late 1980s and 1990s, American garment stitchers making low wages ($6-$8 per hour) were undermined by Filipinos paid the same amount for an entire day’s work. These days, the Philippine garment trade is being devoured by Cambodia (minimum wage: $2 per day), Vietnam ($2-$3 per day) and Bangladesh, where some apparel factories pay a little more than $1 for a day’s work.

This race to the bottom has brought scenes from America’s manufacturing decline — shuttering factories, laying off sobbing employees — into Curameng’s life. It has whittled her workforce to just 500-odd people. “I’ve lost 75 million pesos ($1.7 million) in the last 10 years. I’ve lost almost everything I created to the banks. I’ve been feeling like a super dummy,” said Curameng, massaging the stress from her temples. “The American importers now ask us to make shirts for 85 cents now. How can I compete?”

The new middle class

Before the downfall of US garment factories, American stitchers making low wages could expect to drive a car to work, return to an air-conditioned home and, with enough financial discipline, send their children to a state university.

The Filipino workers who replaced them commute on creaky public jeeps, packed so tightly that passengers’ limbs dangle out the back hatch. They come home to hot, concrete hovels. They share squat toilets with neighbors. They hope to send their children to trade school, perhaps to learn welding or nursing. 

Is it squalor? No. They call this lifestyle “middle class.”

“I’m not poor. I’m not rich, either. I’m right in the middle,” said Evangeline Cabaliw, a 41-year-old garments trade veteran living in Manila’s gritty outskirts. 

Ten years of stitching for Timberland, Levi’s, Victoria’s Secret and others have provided her with a few cherished comforts. Cabaliw’s toes twinkle, from weekly pedicures. So does the knock-off Chanel necklace that hangs around her neck. Neighborhood girls do her laundry for $5 a week. She can now afford it: Curameng, her boss, recently promoted her from stitcher to supervisor. She now works six-to-seven days a week for about $380 per month.

Cabaliw, born to a steel worker and a stay-at-home seamstress, is the most successful of her siblings. Her accommodations are basic: a neatly-kept, two-room dwelling where baby geckos crawl the ceiling. She bathes by ladling herself with water in an outdoor cement stall, a canopy of spider webs overhead. Her rent is $60 a month. Power and water cost