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A Place Called Home and American Apparel – the Logic of Volunteering (part 2)

December 17th, 2010 by David Kronemyer · No Comments

I recently spent some time volunteering at A Place Called Home, located on South Central Ave. at 28th Street in Los Angeles. It is an after-school program for neighborhood kids. Its main concept is to get them off the streets after school and into a safe environment. The first thing we do is feed them. Then we engage them in a variety of interesting activities such as dance, music, video, and some tutoring, too.

The logic of volunteering. There were two types of volunteers at APCH: liberal do-gooders (like myself), and miscreants sentenced to “community service” by a well-intentioned judge, most likely in lieu of incarceration. So, non-profits supply utility to the volunteers, and the volunteers in turn supply utility to the non-profit, mainly by performing a variety of tasks the paid staff is unable (or unwilling) to undertake on their own. Typically these are mundane and require an ample supply of personnel. Skilled volunteers – even those who have but a vague idea of what they want to do – actually pose a threat to the staff, because there’s a risk they could do the job better, or faster, or make the staff look stupid.

On the other hand, the staff can’t be completely condescending towards its volunteers, which, properly understood, are an economic resource. They comprise a kind of inventory, which either can sit on the shelf; be underutilized; or, efficiently deployed. Charities compete for volunteers, especially ones with potential to be converted into cash donors. A contented volunteer can serve as a funnel, or conduit, for private and corporate largesse. A disgruntled volunteer, on the other hand, has the potential to wreak havoc, by negative word-of-mouth. The better-run non-profits actually have volunteer wranglers, whose job it is to harness their power, put it to work on the non-profit’s behalf, and make it seem like a good time in the process.

If nothing else, a plethora of volunteers makes the charity look good. The volunteer coordinator can report to the Board of Directors, “We had over 1,000 volunteer hours last month!” The Board is happy, knowing their good work spreads throughout the community. The volunteer coordinator is happy, not to mention employed. The volunteers are happy, because their liberal guilt has been assuaged, or their commitment of community service hours has been fulfilled. The justice system is happy, because through volunteer service, the probationer has learned the error of his or her ways. The symbiotic link between courts and non-profits in turn assures continued employment for an entire retinue of people, including judges, bailiffs, stenographers, attorneys, parking attendants, janitors, etc. Finally, even the beneficiaries of the non-profit’s largesse are happy, because they have received goods or services that otherwise most likely would be unobtainable, at least on margin. We shouldn’t overlook the off chance the non-profit’s eleemosynary purposes might be advanced.

In making these observations, it’s not my intention to disparage the good intentions, or the good works, of any interested party. Rather, simply to observe that it’s structured, like all other social phenomena.

Sorting. This holiday season, APCH called on its volunteers to sort some garments that had been donated to it by the Los Angeles manufacturing firm American Apparel. Several dozen of us showed up. A gigantic truck pulled into the facility. The driver and a helper used a forklift to unload pallets of boxes into the parking lot. “You’ve gotta take them inside yourself,” they said. If there’s one task I know something about, it’s moving boxes. So, I got a dolly and started hoisting, thinking to myself: “Wow, what a noble gesture. Who says corporate goodness is dead?” We moved the boxes into APCH’s multi-purpose gym/auditorium. We stacked the boxes along the walls of the room, four to five boxes high. The tops of the boxes weren’t taped, they simply were folded over 1-2-3-4 style, so they stayed shut. There were several hundred of them. I did a very neat job. Each box held approximately 150 garments. They were heavy.

As we were moving the boxes, a car pulled up. “Could you put it over there?” asked the parking attendant. The woman driving it replied, “Would you park it for me?”  She was not unattractive, dressed in tight-fitting blue jeans, black boots almost up to her knees. Clearly not appropriate, though, for any kind of manual labor. She brought her assistant with her, similarly attired, though with a nicer-looking ass. She didn’t look to be quite as snooty as her boss. They both looked as though they could have stepped right off the set of “The Devil Wears Pravda.”  “I come with the boxes!” she announced to the Center’s Director, conveying as much feigned enthusiasm, as it was possible for her to muster. She was some kind of an account representative for American Apparel. She had that officious air of a mid-level corporate bureaucrat.

Our next job was to take the garments out of the boxes, and then sort them by gender and size, so they could be distributed to APCH students and their families. The clothes were just thrown into the boxes, without any rhyme or reason. It quickly became apparent all of them were factory “seconds,” in that they had some manufacturing flaw that made them unsuitable for retail sale. The Director was crestfallen. “We were told these were new,” she replied. “No problem,” the rep said. “We’ll simply separate the good ones from the bad ones. The bad ones, just put in an empty box. We’ll haul them away.”  So we got to work.

The logic of sorting. I quickly discovered that sorting garments is fundamentally unlike, say, sorting toys. Toys present a simple case: either their little googly eyes work, or they don’t. All you have to do is pull the string on the nape of Chatty Cathy’s neck, to see if she talks. Defectives are returned loose, or stapled back into their impenetrable bubble-pack wrappers. You don’t need criteria, observational skills, or powers of discernment, in order to determine whether the toy is defective. You can see “in a glance” simply by looking at it; it’s a binary, “yes or no” type of process.

Garments, on the other hand, present a more complex problem. To begin with, their product handling characteristics are different. They typically are sold loose – not in boxes, or bubble packs. Furthermore, any number of different things can be wrong with them. All the way from the arms sewn to the legs, to dye fluctuations, to imperfect seams, to pulled threads, to just being dirty, folded too often, or shop-worn.

Basically, there are four ways in which the facts can fit a set of rules or criteria. They can have good or bad positive fit, and good or bad negative fit. “True positives” are instances that correctly are identified as meeting the criteria. “False positives,” on the other hand, are identified as meeting the criteria, but they really don’t. “True negatives” are instances that correctly are identified as not meeting the criteria. “False negatives,” on the other hand, are identified as not meeting the criteria, but they really do. There are two reasons why everything isn’t either a true positive or a true negative. First, the rules might not be sufficiently specific. And, second, we might not be so hot at applying them.

There is, of course, considerable indeterminacy in this process. For example, you can take a long-sleeve shirt with a hole in it, and make it into a short-sleeve shirt, PDQ. In fact, the first thing my daughter does with her new clothes is to start cutting holes in them. My clothing usually doesn’t look all that great after I wear it for a while. All that some of them needed was a good wash. I started to get the hang of it. I eschewed ladies’ undergarments, which I was unable to identify in principle. I started to hope none of the garments were overtly gang colors.

There were two women next to me, chatting in Spanish. Obviously, mothers of some of the students (no fathers to be found). They clearly knew what they were doing, so I started submitting my “iffy” cases to them for review. They would toss a garment into the air, in a manner not unlike an Italian chef flipping a pizza around, in order to knead the dough. The garment would come down, neatly folded, whereupon it would be flipped into a precise stack. It would have landed perfectly ironed had there been irons in the house. Rejects sailed through the air into a pile off to the side. It occurred to me how many tasks, even simple ones, I am unable to complete. I have so much to learn. I asked one of them where she acquired such mad sorting skills. “I used to work down in the garment district,” she replied, “but my job was sent over to Asia.” They sorted, inspected, sized, and folded everything like some kind of wicked machines. The rep saw what was going on. “You don’t need to do that,” she told them. “Just sort them, you can fold them later.”

Several hours passed. It was hard work. As if by some innate sense, the rep could read the mood of the room. From time to time, morale flagged. The rep did everything she could (within the confines of her limited repertoire) to keep things moving. She would pick up a garment and say something like, “Oh, that looks so cute!”  Intimating she would keep trying them on all day, if she could, then buy them herself.

I tried to be as discerning as possible, retaining only those garments that looked to be in pretty good shape. I would give each garment the benefit of the doubt. I didn’t want to hurt its feelings. One woman – who looked like Daryl Hannah in “Blade Runner” – was sorting very slowly, carefully inspecting each garment. “You don’t need to spend that much time on it,” the rep said. “You can work a lot faster. Just look for the obvious defects.”  For example, dye irregularities or slight over-stitching might be OK; obvious holes, no. I thought to myself, “well, it’s not like they were going to impanel judges to review each case on appeal.”  Every now and then the rep pulled a particularly good-looking garment and set it aside. “It’s for one of my interns,” she said. I headed into my spirit cave, trying to work as quickly and automatically as possible.

Then it was time for lunch. We ate cold pizza. I could have used a couple of beers to go with it, but that wasn’t on the menu. The rep and her assistant had brought their own picnic lunch, and retired to an adjacent room to eat it. For all I know they had a white tablecloth and silverware.

A moment of epiphany. Suddenly, it occurred to me what really was going on. These garments already had been sorted before. American Apparel first had taken its entire excess or obsolete inventory to a high-rent school, say, in Beverly Hills. Their volunteers sorted through them, taking what they wanted. Predominantly, those garments that were in perfect condition, but obsolete and thus unsaleable, due to change in fashion. Obsolescence may have occurred at the manufacturer level, because they made too many, anticipating a trend that didn’t materialize, or that ended too soon. Their style or color may be too last season. So, they clear out old inventory. Or, they may have been returns of perfectly good garments by retailers, because there was no consumer demand.

The ones the schools in Beverly Hills didn’t want, they simply tossed back into the boxes. The same boxes through which we now were sorting. Maybe this already had happened more than once upstream, each institution plucking out the choicest morsels, descending down the ranks of social privilege with each subsequent sort.

This is why we had been instructed to put all of the ones we didn’t want, back into the boxes. As low as we were on the totem pole, we weren’t the last sort. No one institution was permitted to retain that which it didn’t want. It can’t take on cargo. Each was free to select the crème de la crème, but using its own subjective, expectation-based criteria. It takes the most perfect of the rejects, but then passes the rest of them on, for another sort. What matters isn’t so much what is salvageable, as it is, what is disposable.

Who knows where they would go after us, what eager group of volunteers there would be to sort through them again?  From each according to his ability, to each according to his need. The lower one is on the food chain, the less likely one will be to complain. I suppose the last sort would go to a rescue mission along Alameda Street, and then off to a rag dealer, where the remaining garments would be sold for pennies on the pound. Those were the sorters of last resort. A cruel logic, indeed. There is no waste; each part of the pig gets eaten.

From an economics standpoint, the process is designed to achieve equilibrium. It would be economically inefficient for a user at any given point to take more garments than it could distribute to its constituency. That would disrupt the transfer of garments to less-worthy beneficiaries. But it also would be economically inefficient for a user not to take enough, because then the less-worthy beneficiaries would receive a better quality of garment than that to which they had become acclimated. This in turn would increase their expectations as to the quality level of garments they might expect to receive at some point in the future.

There is a point of perfect calibration for each institution. To some extent this variable depends on the skill level and sorting expertise of the volunteers. The job actually gets harder with each subsequent sort, because the volunteers need to be more discerning, in order to detect subtle flaws that would disqualify the garment at their institution’s tier. But, all in all, it doesn’t need to be that precise. Which is the reason why the rep encouraged everyone to work quickly.

I think that, on margin, the risk of false positives – an institution taking garments, which it should be passing on  – is greater for American Apparel, than the risk of false negatives – the institution rejecting those, which it should be taking. Too many false positives result in a corresponding increase in corporate cost. The institution claiming false positives will capture and retain for its benefit scare economic resources that American Apparel otherwise could claim on its own behalf.

Around mid-afternoon, the Director said, “We’re done, we don’t need this much stuff.”  “Keep sorting,” said the rep, tossing her hair as if to emphasize her point. She needed for us to keep sorting. We were the manual, unpaid labor that enabled the flow of garments to continue downstream. Whatever happens, the sorting process must continue, in order for these subtle marketplace adjustments to occur.

Fake corporate goodness. It isn’t hard to discern American Apparel’s motives. To begin with, they take a tax deduction for the full value of the garments they give away, even though their street value is much less, possibly as low as zero. It’s likely they take a tax deduction for the full value of the goods at each level of sort. They may take these deductions in different fiscal years (once, say, on December 25th, another, say, on January 5th), so, no one is the wiser. It’s buried under layers of audit proof numbers. Most likely American Apparel also didn’t give full credit to the retailers, which returned garments. Returns are subject to various charges. In some instances, the manufacturer expects the retailer to be responsible for obsolescence, and denies a returns credit altogether. (1)

Then, there is the noblesse oblige, the polished shine on their escutcheon that comes from corporate charity. “We are involved with our local community,” the leaders proudly declaim. Management looks like they’re upstanding corporate citizens, and maybe even pick up a plaque or two.

There is little risk in this strategy. What would be your main concern if you were a garment manufacturer distributing 25,000 items of clothing to people for free?  Not that you weren’t paid for them. Not that the people who get them don’t deserve them. Unlike, say, a book publisher or a record company, you’re not worried about royalties, which typically are based on the number of units sold. Which is why paperback books that are returned often have their front covers torn off, and why CDs have holes drilled through their plastic shells: to mark the merchandise as belonging to a different (and inferior) class of commerce. (2)

No, your concern is more nuanced, more piquant, more sophisticated. It’s “brand protection,” or, preventing the imprimatur of your brand from becoming diluted, or devalued in the minds of the consumer. All of the advertising spend, wasted. Even though they mainly sell obsolete (as opposed to damaged) merchandise, in this respect, “factory outlet” stores, like those in Cabazon, are problematic. They potentially appeal to the same class of customers. There is, however, very little overlap between the {class of people to whom garments are distributed} and {the class of shoppers at high-end retail malls who purchase them new} at the lower levels of the sorting process.

The purpose of the rep is to prevent brand dilution resulting from too many false positives (or false negatives) at the applicable tranche. Maximum corporate utility can be extracted from the goods, but not at the risk of detriment to the brand. This is why the sort necessarily happens fast, especially during the holiday season. An over-discerning volunteer is as much of a liability as an under-discerning one. There would be no transferring of unopened boxes. If we ran out of time, they would remain unsorted. The reason why is there would be no brand protection at that strata of the community. And, no double (or triple, or quadruple) tax deduction.

And so it continued. The rejected garments were reboxed, reloaded, and then regifted. Another truck would pull into another parking lot, to be joyously greeted by eager volunteers. The boxes, increasingly dilapidated, were wanderers – like the homeless, on the lowest rung of the economic ladder.

I left after about ten hours of work. It looked like there were a lot of boxes left. (3)

Endnotes

(1) In 2003, J.C. Penny, Dillards, Wal-Mart, Saks, Federated, Dollar General and other department stores were sued by garment makers alleging they took improper deductions from receivables, in some cases exceeding 85% of invoice value, on pretextual reasons ranging from bad shipping labels to invoice mis-matches. “The stores might say they did not receive a dozen out of six dozen pairs of pants ordered, so they deduct the cost of the dozen.  The stores might say the new line of capri pants did not sell until they were marked down 40 percent, and the stores deduct the 40 percent.  Some stores offer free tailoring to customers and deduct the charges from the vendor’s bill, according to a vendor who had deductions for alterations.” Rozhon, T., “Stores and vendors take their haggling over payment to court,” New York Times (2005, May 17).

(2) Having worked for several of them, it always has amused me how record companies in particular don’t get this logic.  They empty their cabinets of promo singles, cutouts, and deleted or obsolete titles.  They give away hundreds of CDs, ostensibly for the cause of corporate philanthropy.  There is something peculiar about these CDs, though, which is, nobody wanted to buy them at retail.  So, what makes the record company think anybody wants to be given them, even for free?  What a bunch of morons, sitting around wondering why music has become devalued to consumers, when they’re the ones who have instigated precisely that outcome.

(3) In August 2010 American Apparel announced it was in violation of various covenants pertaining to loan agreements, and that it most likely would file for bankruptcy.  It appears it has not done so due to lender forbearance, however, the possibility it still will do so remains high.  Chang, A., “American Apparel reworks debt agreement with Lion Capital,” Los Angeles Times (2010, Oct. 2).