The Price of Cheap Clothes

For years I’ve practiced a little ritual when I shop for clothes. I got it from watching my father, who, like his father before him, spent decades in the textiles industry until he was forced into retirement when his last remaining customer moved his manufacturing to Southeast Asia.

It’s a three-part process that begins with me running my fingers along the inseams of whatever garment I’m considering buying to check the quality of the stitch (one of the best ways to tell how well your clothes have been made). Next, I check the label to see where it was made; and finally I glance at the price tag. Then I typically place the item back on its hanger and mutter obscenities under my breath while I search for the clearance rack.

My cynicism is not unjustified. I remember visiting my dad’s shop one day in the early 1990s when he was still making clothes for the Urban Outfitters line Free People. He pointed to a mound of simple cotton sheath dresses piled high on the finishing table. “See that,” he said, indicating a stray garment. “That costs me about $2.50 to make. You know how much they sell it for?” He didn’t have to tell me. Having accompanied my girlfriend on more than one Urban shopping adventure I already knew the answer: A lot more than they paid for it.

I don’t know how many of Urban Outfitters’ dresses are still made in the U.S., but thanks to our demand for cheap goods, trade liberalization, and the rise of mass retail outlets like Walmart, I do know that, today, even $2.50 is too much for most profit-driven retailers to pay for a garment—especially when they can get it made for half that much in Cambodia or Vietnam or Bangladesh, where the national minimum wage of roughly $10 a week is among the lowest in the world.

Last week, when a factory block outside the Bangladeshi capital of Dhaka collapsed—killing nearly 400 workers and sparking a frantic days-long search for survivors—rescuers found garments and labels from Canada’s Joe Fresh, Italian clothing company Benetton, and Mango of Spain in the rubble. Published media reports have also linked brands from J. C. Penney, Children’s Place and Cato Fashions to the compound.

While the scope of the Dhaka tragedy is unprecedented, the circumstances that made it possible are not. The cause of the collapse has been linked to simple greed. The building’s owner had received an illegal permit to build a five-story structure, but decided to maximize his investment by pushing it to an unsound eight floors instead.

But it’s not limited to Bengali slum lords.

Research shows that brand-name clothing and accessories boast among the highest markup rates of all retail goods, regularly exceeding 300 percent.

To be fair, many companies do have processes in place to audit foreign vendors for compliance to basic health and human rights codes and penalize them for deviating from them. However, inspections are often irregular, and it’s not surprising that over the years, a number of popular brands—including Nike, Disney, the Gap, Burberry and Banana Republic—have been linked to foreign sweatshop scandals. Even the Duchess of Cambridge has not been immune to scrutiny.

Still, the fact that a garment was made by low-paid workers in a developing country should not alone spark an ethical quandary for the conscious consumer. The problem isn’t that low-wage factories exist (some liberal economists even say that sweatshops are a necessary first step on a developing nation’s road to economic prosperity); rather the problem is how they are forced to operate to meet the extreme cost and scheduling requirements of retailers seeking to avoid strong U.S. labor and wage constraints.

Groups like the Institute for Global Labour and Human Rights and the International Labor Rights Forum issue regular reports on specific industries and companies; and the United Nations-sponsored International Labour Organization (ILO) drafts and monitors a range of fair labor agreements with individual nations. But, according to activists, all are lacking a viable enforcement regime.

That means it’s up to consumers (and a handful of proactive, ethically minded retailers) to do their homework if they want to avoid funneling money to labor-rights violators. Unfortunately, this is easier said than done. According to ILF’s Trina Tocco: “It’s hard to find companies producing completely responsible garments because there are so many stages in the supply chain: gathering raw material, spinning it into cloth, dyeing the cloth, and cutting and sewing the garments. You could have a union-made garment made of cotton picked by a child laborer.”

So what’s a shopper to do? While an unusually low price tag may be a good indicator that a product has been made under exploitative conditions (yes, I’m talking to you, H&M), it’s certainly not the only one. Lots of top-line retailers with high markups have been linked to unscrupulous labor practices. The best thing to do is educate yourself on who the repeat violators are and avoid labels that reflect that a garment was made in a country known for rampant labor rights violations (Bangladesh being one). Most of all, be conscious that the great deal you managed to swing on your wardrobe could have been forged on the back of an exploited laborer.