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Why Is Ethical Fashion So Expensive? We Explain

We all want to make better buying decisions. It’s just…well, why is ethical fashion so expensive? The answer? It’s complicated….

By: Alex Yi 

All consumers are faced with making difficult decisions every day. These relate to our needs, budget, preferences – and ethical views, and most of us prioritize what we want and need over how those purchases may impact the planet. 

Simply put, consumers are interested in purchasing items, clothing, food, and furniture at low rates to save them money – but they don’t often think about the third parties involved in creating and fabricating those products. Most people aren’t overly concerned with issues like fair wages, workers’ rights, CO2 emissions or the sustainability of materials. But for those of us who do care about such things, we’re often deterred from making better purchases due to the higher prices of most sustainable goods. 

But why is ethical fashion so expensive? It’s not just fashion, either – sustainable and ethical furniture, food and beauty products are also significantly pricier.

Sure, it makes sense that by definition, ethical fashion pays higher wages, so the clothing will be more costly. But there’s more to it that just that. Here are a few reasons why ethical fashion is so expensive.

Why Is Ethical Fashion So Expensive?

Paying For Talent

It’s an ironic reality that as a rule of thumb, the bigger the fashion conglomerate, the lower the wages they pay to their workers. And the higher the salary their CEOs get.

Their business models go something like this: pay the executives the most. Their job is to ensure all teams around the world are functioning well to manufacture their clothing. Compensation for running those companies is usually in the high six figures, but it can go way higher. For example? At the top of the fashion CEO pay list is Patrice Louvet, the new chief executive officer of Ralph Lauren Corp., who pulled in $23.8 million.

If we’re talking about a fashion brand that’s not only sustainable, but is created by an internationally renowned, highly coveted designer like Gabriela Hearst or Mother of Pearl, of course you’re going to be paying more for the privilege of wearing that creator’s designs. But it’s not just luxury fashion designers and execs who get the big bucks: Doug McMillon, CEO of Walmart, for example, received a pay packages of more than $20 million last year.

Marketing and Public Relations are the next most spent-on departments. Their jobs, of course, are respectively to make the consumer want the products, and to ensure magazines and newspapers frequently mention the brand.

You may not realise it, but even fast fashion brands like Walmart or TopShop have fashion designers working hard to create styles that represent the brand, and they’re usually next on the pay scale. Those who work in offices, helping the brand function legally, logically and financially, are next in line, then there are those who work in retail. And as you probably know, those who actually piece the clothing together are at the bottom of the list.

It kind of makes sense – after all, these are the least-skilled jobs. And it’s fine not to pay these workers as much as say, the designers, whose talents can make or break a brand. But there’s no doubt that they all deserve a living wage.

Paying A Living Wage

Thanks to globalisation, companies often choose to manufacture clothing in countries where wages are the lowest. It’s just logical: if you had a company and wanted to make a profit, would you make your clothing in the UK, where the minimum wage is around $20, or in Bangladesh, where it’s under $2? The key here is twofold: one, to understand what a living wage is – and two, to ensure it’s enforced. 

A living wage has different definitions, but it’s generally considered to be enough income necessary for a worker to meet their basic needs. ‘Needs’ are usually defined to include food, housing, and other essentials such as clothing, but due to the flexible nature of the term “needs”, there is no single universally accepted measure of what a living wage is. That being said, there’s little doubt that a living wage in say, rural India, is far, far lower than it would be in say, New York City. So gain, no wonder brands choose to make clothing in countries where the cost of living is low.

If a brand ensures its customers that its workers are paid a ‘fair’ or a ‘living’ wage, this should mean that these workers live well with sufficient food, clean water, clothing, access to education, and should even have enough left over for savings. Of course, ensuring these wages are met means a company is likely paying a bit more than their non-ethical competitors – and the consumer will end up paying the difference.


Way Beyond Wages

But fair labour isn’t just about wages paid; it’s also essential to check on factories to make sure the safety standards and labour conditions they promised are actually being put into practice.

Generally speaking, workers should also be given basic rights like weekends off, eight hour days, vacation time, sick time, health coverage, bereavement time, and of course, they should be working in safe conditions. 

This most certainly was not the case in Rana Plaza, Bangladesh, where workers who were piecing clothing together for the likes of Benetton and other big Western fashion brands burned to death after being locked inside to keep employees from leaving the terrible conditions there.

Ethical fashion brands whose production teams are working abroad will spend money on inspectors who pay surprise visits to factories overseas to learn how the employees there are really being treated – and that cost is passed on to us, too.


Larger Companies, Larger Savings

Economies of scale is a term used to refer to savings of buying in bulk. The more you buy, the cheaper something is, and that’s why large brands like Zara pay less for materials – even sustainable ones – than smaller clothing makers.

According to Investopedia: “Most consumers don’t understand why a smaller business charges more for a similar product sold by a larger company. That’s because the cost per unit depends on how much the company produces. Larger companies are able to produce more by spreading the cost of production over a larger amount of goods. An industry may also be able to dictate the cost of a product if there are a number of different companies producing similar goods within that industry.

There are several reasons why economies of scale give rise to lower per-unit costs. First, specialization of labor and more integrated technology boost production volumes. Second, lower per-unit costs can come from bulk orders from suppliers, larger advertising buys, or lower cost of capital. Third, spreading internal function costs across more units produced and sold helps to reduce costs.”

In short, the smaller the business, the higher the costs. And since most ethical companies are run by only a handful of people, you can now understand why their goods are pricier.

The Cost of Good Materials

Clothing is made from countless materials, some of which are good for the Earth and for you, others not so much. Because they’re made from coal and petroleum byproducts, nylon, acrylic and polyester amongst the cheapest – and yukkiest – fabrics available for making clothes.  

Cotton is another common thread used for clothing manufacturing, but it’s not good for the environment, as it sucks up a lot of water, is heavily sprayed with pesticide, and is often made from unnatural GMO seeds, unless it’s organic. However, since it, like the fabrics mentioned above, is mass produced, its cost is actually lower than other more Earth-friendly fibres like hemp.

Turning hemp into fabric is a time consuming process that requires more labour. The same could be said for linen and eco-friendly bamboo (as opposed to the bamboo fabric that uses chemicals to soften it quickly.). Since these textiles take longer to make, and since they cannot be bought in mass quantities like artificially made fabrics, they’re more expensive.

In fact, most sustainable fabrics are specially made to order, which reduces the amount of waste in terms of mass producing fabric, but it also raises the price. But there is hope! Think of sustainable fashion like organic food: at the beginning, it was really expensive, but the more people bought into it, the more the prices went down.

Summing Up

So, why is ethical fashion so expensive? To sum up, it is for several reasons:

  1. Ethical brands pay fairer, higher wages
  2. They also pay inspectors to check the working conditions in factories
  3. The fabrics they use are more expensive
  4. Ethical brands are usually smaller and can’t take advantage of economies of scale

While sustainable fashion may still be expensive to some, there’s a lot of good news here, too. For example:

  • Sustainable fashion’s higher prices ensure we buy better, and buy less.
  • There are also some shops that are ethical, but are larger, so they can take advantage of economies of scale to lower their prices. Think: Everlane and Reformation for example.
  • Ethical fashion is also thrifted or second hand fashion, and there’s plenty of that to be found on sites like Thred-up or Depop.
  • And finally, the more demand there is for ethically and sustainably produced fabric and clothing, the lower the prices will go.

We have a lot of hope for this decade being the most sustainable yet!

All images: NET SUSTAIN

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