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You could select the line of faces that faces the skirt and do a Radial scale on Y :o). Watch from the outside of the skirt down between the two to make sure there's not too much space :o). In the right click flyout menu there's a Scale Radial and then Radial Y.

Yeah, I've done that, but to get it out enough to not be inside, the gap between the hem and the skirt becomes noticable. Some vertices move out sooner than others, so when I have gotten them all out, there's a noticable gap between the hem and the shirt, and it's not exactly the same all over either.  This gap doesn't look good at all in renders, especially close up, even if it's very minute (2 or 3 units in Wings is enough to make a gap that looks bad in renders)

I still can't quite figure out how to get that really neat and tend to be a bit of a perfectionist when it comes to that stuff..  But it works for you with a simple Y radial scale or normal move?

I tried making the hem, which is not supposed to be super-thick, with a displacement map, and it gave really nice results too. I'm not actually sure what the advantage would be with a extruded hem over a displacement map?

Just curious and fascinated, since I've pretty much done all my Wings modelling alone and never discussed it with anybody else.. :)