Today, we can buy artificially cheap clothing for almost as little as a coffee. And fashion is only getting cheaper with ultra fast fashion giants like Shein, Boohoo, and Fashion Nova flooding the market.
To rapidly overproduce these ultra-cheap clothes, fast fashion relies on paying garment workers poverty wages. No major clothing brand pays its garment makers in Asia, Africa, Central America, or Eastern Europe enough to break out of cycles of poverty.
Yet despite its countless social and environmental harms, we have to acknowledge that fast fashion is one of the most financially accessible options for some people. And advocacy for living wages is often met with a concern about whether paying garment workers more will increase the cost of clothing and affect accessibility.
But paying living wages doesn’t necessarily mean prices have to rise. And if they do rise, it will only be by a small amount since labor makes up such a small percentage of the final price of a garment.
It all depends on the calculations a brand makes and how the profits get distributed. Let’s unpack.
First, it’s useful to understand the cost breakdown of an average t-shirt. “Usually, the price a brand pays to the factory is 25% of the retail price. If you are buying a t-shirt for $20, you can assume that $5 was paid for that shirt. From that $5, between 5–12% is reserved for labor costs. That means that roughly 25–60 cents from your $20 shirt will go to factory workers,” says Anne Bienias, Living Wage Coordinator at the Clean Clothes Campaign, on an episode of the Conscious Style Podcast.
And the additional amount needed to pay garment workers a living wage is probably a lot less than you would expect. “Looking at the gap between minimum wages and living wage estimates for garment production countries, we see that on average the minimum wage would need to triple to get to a living wage. That means that for a $20 t-shirt, instead of 25–60 cents going to labor, it should be 75 cents–$1.80,” adds Bienias in a follow-up conversation.
This means that it would cost brands as little as $0.50 more per $20 t-shirt more to ensure that the garment workers that made it had liveable wages. In broader terms, the difference to ensure living wages for the makers of our clothes would make up just 2.5% of the final product cost.
One of the key reasons paying living wages doesn’t make as big of a difference on price as you might think is because of the massive profit margins on clothing that line the pockets of fashion billionaires. The Forbes 2021 Billionaires List is full of fashion industry kingpins who have made their fortune by exploiting garment workers — and everyone else along the supply chain.
So let’s set the record straight:
The money paid to garment workers is not what determines the majority of the retail cost of a garment.
And technically the retail price of a garment wouldn’t even need to rise at all after paying living wages — if the brand were willing to budge on their hefty profit margins.
How they finance living wages is up to the brand. For example, they could make smarter decisions in their advertisement budget or look at other choices they make in their business model. For example, ethical footwear brand VEJA has a cost of production 5-7x higher than their competitors, but by eliminating advertising from their budget they can still sell their shoes at a similar retail price.
Also, it’s important to note that:
Just because a garment is expensive or from a luxury brand, doesn’t guarantee that the brand is paying ethical wages.
According to Fashion Checker, a campaign by the Clean Clothes Campaign, hallmark luxury brands such as Louis Vuitton Malletier SA (LVMH), Hermes, and Chanel do not pay living wages. And according to Fashion Revolution’s 2022 Fashion Transparency Index, some of renowned luxury brands — including Dolce & Gabbana, DKNY, and Tom Ford — scored 0-5% for transparency.
The high prices of luxury are often used as a way to create a unique brand name associated with luxury. A $400 Gucci t-shirt is not that different from a $10 H&M one. “In theory, if luxury clothes’ prices decreased, then actual demand would also decrease because the clothing would lose its appeal to status-conscious consumers,” explains The Economics Review.
So long story short: paying higher wages does not have to influence the price you pay as a customer. Although brands may prefer it if you think it will so that they can delay addressing the need to address their exploitive business model.
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About the Author
Stella Hertantyo is a slow fashion and slow living enthusiast based in Cape Town, South Africa. Stella finds solace in words as a medium for sharing ideas and encouraging a cultural shift that welcomes systems change and deepens our collective connection to the world around us. She is passionate about encouraging an approach to sustainability, and social and environmental justice, that is inclusive, intersectional, accessible, and fun.
Stella holds a B.A. Multimedia Journalism from the University of Cape Town, and a PGDip in Sustainable Development from the Sustainability Institute. She currently works as a writer, editor, and social media manager. When she is not in front of her laptop, a dip in the ocean, or a walk in the mountains, are the two things that bring her the most peace.