The Garment Center, as it’s known, is an incubator for U.S. sartorial talent and innovation. With Parsons the New School for Design and the Fashion Institute of Technology (FIT) — two of the premiere fashion institutions in the world — only a short walk away, young men and women with ambitions to “make it” in fashion can test their ideas (and their patience) as interns in one of the 846 design houses headquartered in New York City before entering the highly competitive job market.

From an outsider looking in, it may appear that U.S. clothing manufacturing is alive and well — at least in this small industrial pocket in the middle of Manhattan. On any given day you can find factory workers pushing massive racks of clothing down bustling sidewalks or young fashionistas hauling fabric or cutwork to the next stage in the production cycle.

But in truth, while consumer attitudes toward “Made in America” are shifting, U.S. fashion manufacturers are still struggling due to lack of work. In 2011, approximately 3% of the clothing sold in the U.S. was actually manufactured here, according to a report from the American Apparel and Footwear Association (In 1960, that number was 95%). Ralph Lauren infamously drew outrage from politicians and the public alike last summer when it was revealed that the company’s U.S. Olympic uniforms were made in China.

Just check the labels of clothing items or accessories stocked in stores across the country. You’re much more likely to see “Made in China” than “Made in the U.S.A.” And that’s a big problem, not just for American fashion designers and manufacturers, but also for the U.S. economy as a whole. No wonder President Barack Obama and other legislators have recently pushed for a revival in American manufacturing.

“If Americans bought just 1% more of products made in USA, it would create 200,000 jobs,” says Dave Schiff, co-founder and Chief Creative Officer for Made Movement, a marketing agency focused solely on American-made products. “The bottom line is when people buy things made in America, it’s good for America.”

Quality vs. Quantity vs. Cost

It’s no secret that overseas production is thought to save businesses money — a savings that is then passed along to consumers in the form of lower prices. But designer Nanette Lepore, who has been a constant proponent for American fashion manufacturing and produces approximately 85% of her eponymous clothing line in New York City, maintains that, for her business at least, the cost saving is negligible.

“We don’t find much difference in the margins overseas,” says Lepore. “I do counter-costs all the time because I want to make sure that I’m not overpaying or overcharging. We find that we are within a dollar or two of what we’re making here in America.”

The brands that benefit most from outsourcing are those working in sheer volume, Lepore says. Specialty labels like hers and others stationed in New York City would likely find a cost benefit to producing in the Garment Center, yet many of these designers are still sending work to other countries — whether because of a force of habit or a belief that producing in America is too expensive.

“That is a fallacy,” Lepore says. “If you’re at my price level [Lepore’s dresses range from $200 to $500], a little below or definitely above, you can manufacture a gorgeous product in NYC and make a profit. I know because I’ve been profitable here for the last 12 years.”

On the consumer side, it’s true that American-manufactured products are likely to cost more, but according to Erica Wolf, executive director of Save the Garment Center — an organization that seeks to preserve New York City as the capital of American fashion — the tradeoff for price is quality. “People buy things now that they can wear for a season and then get rid of it,” Wolf says. “Maybe that’s not the answer anymore, with where our economy is.”

This focus on quality and craftsmanship is what American-made fashion is known for — not only in the U.S., but also internationally — and is a major reason why designers like Lepore keep their production local. She maintains that working with local factories is the reason her brand has been successful. The proximity of her design studio to her contractors allows her to make changes at any time throughout the production process. She can check a garment’s fit on a model at any time. And if one item is selling particularly well, she can have more cut, sewn and in stores in a matter of weeks.

“You just can’t get the fit and quality [overseas] that you can working here,” Lepore says. “Plus, every time I produce here in a factory we create more jobs and support future American designers.”

An American Talent Incubator

Many of today’s top American designers got their start producing lines in local factories in the Garment Center. These factories often enable new designers to produce small quantities — as low as 10 to 30 pieces — a luxury that isn’t possible when outsourcing.

Designer Yeohlee Teng attended Parson’s the New School for Design — the longtime home of Project Runway’s aspiring designers — located in the center of the fashion district. In 1981, shortly after graduating, she decided to start her own line, in part because the resources to do so were right at her fingertips.

“Back then, putting together a collection and getting it sold at Bergdorf or Barneys was easy,” Teng says. “The Garment Center still has the infrastructure that enables [young designers] to do what I did. You can get someone to cut for you, sew for you, and grade for you all within a couple of square blocks.”

In 2009, Teng helped spearhead the Made in Midtown study— a joint effort with the Design Trust for Public Space that examined how the Garment Center benefits New York. The study was born as a response to city legislators, who were considering removing zoning protections for the area in order to transform it into a more “tourist friendly” destination. (The consideration is currently stalled, due in part to the study).

Made in Midtown helps paint a picture of just how important American fashion manufacturing is to New York and the country. According to Wolf, who was a key advocate of the study, the Garment Center alone accounts for more than 1.1 million square feet of manufacturing space. This space houses more than 7,100 manufacturing jobs, accounting for $2 billion of economic output and 3,500 indirect jobs. And this is as many factories in the area are working at half and quarter capacities.

The study also found that the Garment Center is more than just manufacturing space — it’s an incubator for American talent and innovation. “I think we have proven that, beyond a shadow of a doubt, if you want to grow new talent, you have to keep the infrastructure,” says Teng. “It’s important for consumers to realize that designers are not the only people responsible for the clothes on our backs. If they are no makers, there are no clothes.”

Shifting Consumer Attitudes

Recently, there have been indications that consumers are catching on to the importance of  “Made in America.” According to a study by Consumer Reports released in February, 78% of respondents said that they would rather buy American-made products, and 60% said that they would buy American, even if the products were more expensive.

Schiff from Made Movement claims that this mirrors what he’s seen at his agency. While the old “Made in America” often represented an inferior product, today, U.S. manufacturing not only represents superior craftsmanship, but also environmental benefits, a smaller carbon footprint, and an investment in American jobs. And from what Schiff has seen, that’s what educated consumers want.

“American consumers are so demanding,” he says. “Not only do we demand a great product, but we also demand that the world is a better place because that product exists. That’s a tall order.”

Now that consumer attitudes are shifting, retailers are following suit. Walmart recently announced that the company is investing $50 billion in American-made products over the next 10 years, and Schiff predicts that brands will be jumping to fill that space on their shelves. From there, it’s up to consumers to make buying American part of their shopping process, so demand continues to grow and more companies make the decision to go local.

“Of course there are price concerns with made in the USA,” says Wolf. “But if you want to make change, it comes out of your wallet. Every consumer has a voice with their money, whether it’s a $20 pair of leggings or an $800 dress. It’s your decision.”