Skip to comments.What does that $14 shirt really cost?
Posted on 05/04/2013 4:32:40 PM PDT by rickmichaels
Before last week, Loblaws Joe Fresh was known mostly as a hot spot for cheap, stylish clothing. Few customers likely cared how the clothes were made. That all changed with the deadly collapse of an eight-storey factory complex used by the retailer in Bangladesh. Nearly 400 people are dead, and the owners of the complexand the factories within itthat was reportedly built without proper permits, have been arrested on charges of negligence. Bangladeshs government has vowed to inspect every manufacturer in the country.
The worst industrial accident in Bangladeshs history offers an uncomfortable glimpse into the fast-growing garment industry there, and the treatment of its workers. According to a 2011 report by the consulting firm ORourke Group Partners, a generic $14 polo shirt sold in Canada and made in Bangladesh actually costs a retailer only $5.67. To get prices that low, workers see just 12 cents a shirt, or two per cent of the wholesale cost. Thats one of the lowest rates in the worldabout half of what a worker in a Chinese factory might makeand a major reason for the explosion of Bangladeshs garment industry, worth $19 billion last year, up from $380 million in 1985. The countrys 5,400 factories employ four million people, mostly women, who cut and stitch shirts and pants that make up 80 per cent of the countrys total exports.
For that $14 shirt, the factory owners can expect to earn 58 cents, almost five times a workers wage. Agents who help retailers find factories to make their wares also get a cut, and it costs about $1 per shirt to cover shipping and duties. Fabric and trimmings make up the largest costs65 per cent of the wholesale price. Toronto-based labor rights activist Kevin Thomas says wages ultimately get squeezed most because businesses can easily control them, unlike the price of cotton or shipping.
A cost breakdown only partly explains the maze of relationships in the garment-supply chain. The retailer H&M, which had no connection to the collapsed building, works with 166 different factories in Bangladesh. It has published its supply chain, listing every factory around the world that makes H&M clothing in an effort to prove what most major stores claim: that it knows where its clothes come from. But according to observers, many dont. Though most brands have a regular stable of factories, they may contract hundreds more for short stints. It would be a very high risk to have a limited number of suppliers, says Adriana Villaseñor, a senior adviser with the global retail consulting firm, J.C. Williams Group. Smaller factories often take on more than they can produce, Thomas says, and then subcontract later onwithout the retailers knowledge. This week, Wal-Mart said it had no authorized production in [the collapsed] facility, but added that if unauthorized production were discovered, it would take appropriate action.
Amid mounting protests, both in Bangladesh and abroad, and calls for boycotts, retailers have pledged to improve working conditions. Primark, a U.K. chain that made goods in the ruined factory, and Loblaw Companies Ltd., have said they will compensate victims families. But Bangladesh is just one country in a vast supply chain. H&M, for instance, uses hundreds of other factories, including 262 in China. In Vietnam, workers make only slightly more than in Bangladesh: 14 cents per shirt. Real reform will mean paying a lot more than $14 for a shirt.
All seriousness aside, sometimes the only thing worse than working in a sweatshop is not having a sweatshop to work in.
Imagine - $.12 for labor. You couldn’t even get a member of the Garment Worker’s Union to put thread on their machine for $.12, let alone sew anything.
People want jobs brought back to the U.S. but how many of these same people would be willing to pay the extra cost for a knit shirt, the staple of many wardrobes, even if it were made in the USA. Some of us can no longer afford it, even if we wanted to.
Used to make tee shirts for the guys in my family but even decent material is getting hard to find.
>> What does that $14 shirt really cost?
Rejoice! Free trade at its finest-how it works on the other side. Remember Free Trade always means cheap and nasty, in more than one sense.
It would be much better if those people had no jobs and just starved.
Women around here buy a lot of them.
But I think the average American Walmart/Target shopper would flee in horror if confronted with that price tag. They've demonstrated over and over that they want the Bangladeshi stuff, regardless of how it was made.
I go to the thrift store and get that $98 dolar shirt for $2.
Who pays $14 for a shirt? Not I.
Retail prices for underwear, tee shirts, knit shirts and the like didn’t drop when trade policy permitted offshoring of production. Retail margins jumped into the sixties and remained there.
And the permanent stains of somebody else’s sweat under the arms make it the perfect modern fashion statement. :)
Of course what these commies never stop to ask is what kind of standard of living would these workers have if they didn’t work in a garment factory? In Bangladesh many people go hungry every day and would give anything to have one of those jobs.
Yes of course they did. How do you think Walmart got so big?
In more prosperous times I’d buy very nice broadcloth Egyptian cotton dress shirts retail at a price nearing that of having them custom tailored. Would have bought tailored if they were available here, but tgat’s a big city amenity. Off the rack or not, they still lasted forever though. The whites would get cycled into casual wear after several years due to yellowing somewhat, they’d no longer get that up-and-coming executive blinding white, lol. Man, the money I’ve wasted. Haven’t been a corporate drone for many years.
Except that thrift stores are now dumping grounds for Nordstrom, Macy’s, etc, when seasons or fashions change, or a button goes missing.
The actual retail margin is, I read today in the WSJ, 1-2%.
Er, no. Free Trade, by definition, means the absence of violence.
What do you mean "now"? I believe Woolworth pioneered that practice back in the 1930's.
I notice a lot of men’s suits are fabrique au Canada.
You want to talk discount mass, compare Sam Walton’s Walmart that prided itself in carrying American made goods. Multipacks and polybag programs existed then too. They were no cheaper after than before. Where cheaper did arise you’ll find lower quality goods. Those Polos you find at TJMaxx aren’t the same as the ones in Macy’s, they were made to spec to be sold at that price with a specific margin requirement at a specific retail preprice.