Behind the low price of American clothing

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Behind the low price of American clothing The price of clothing in the United States has fallen sharply over the past two decades. Chain stores such as Zara and H&M set the tone for cheap fast fashion.

The clothing label from this fast-fashion chain shows that these clothes come from all over the world, including Bangladesh. A series of deadly fires took place in garment factories in Bangladesh. Recently, the collapse of a building resulted in the death of more than 1,100 garment workers.

This surprised Brooks. Brooks is a 41-year-old software salesperson. She said that I have been shopping too much in Zara. Brooks said that this only shows that we did not notice the origin of the clothes before.

The desire of Americans for cheap clothing is one of the most powerful economic forces that has triggered the prosperity of the garment industry in Bangladesh. The consequent trend of increasing production capacity has become the fuse of a series of terrible accidents mentioned above.

Compared to other expenses, American consumers have become accustomed to spending less on clothing, but they must be value for money. According to the Commerce Department, Americans spend only 3% of their annual expenditure on clothes and footwear last year, compared with about 7% in 1970 and 13 in 1945. %about.

One reason that Americans spend so little on clothing is that clothing prices in the United States have fallen sharply in the past 20 years. Before that, in the 50s and 60s of the last century, especially in the 1970s, the price of clothing has been rising.

Zara, a company of InditexSA, and H&M, a subsidiary of Hennes & Mauritz AB, set the tone for “fast fashion”.

Dean Maki, an economist at Barclays PLC (BARC.LN), said that current apparel prices are definitely lower than those in the 1990s.

According to Jessica Tenvose, an economist at the U.S. Bureau of Labor Statistics (U.S.), clothing prices in the United States have only risen by 10% since the 1990s. In contrast, food prices have risen by 82% during the same period. The U.S. Bureau of Labor Statistics is responsible for compiling the ConsumerPriceIndex.

If inflation is adjusted, the price of clothing will decrease.

This situation is undergoing minor changes. In December 2012, clothing prices rose by 2% year-on-year. The previous year, when cotton prices soared, clothing prices rose by nearly 5%.

But economists say that retailers and apparel makers are reluctant to increase prices given that consumers are used to spending less money on clothing, and they are more eager to find low-cost clothing.

The economic downturn in the United States and the stagnant growth in wages have resulted in limited consumer disposable income, which has increased the pressure on retailers, but people’s desire to buy new trendy apparel remains strong.

At the same time, labor costs have been rising rapidly in China, which has long served as a world factory.

As a result, retailers and garment manufacturers are shifting to lower-cost alternative countries such as India, Vietnam, Cambodia, and Bangladesh, where primary clothing workers earn less than $40 a month.

Last Sunday, the Bangladeshi textile minister said that he will soon begin dialogue with labor organizations and factory owners to reach an agreement on a new factory minimum wage.

If wages increase too much, Western retailers may transfer orders from Bangladesh to other countries, but Bangladeshi workers' wages will have to triple to exceed the wages of Chinese workers.

In the short-term, foreign brands producing clothing in Bangladesh may need to digest this wage increase factor on their own, just as many of them did in 2011 when cotton prices rose.

In 2005, western companies began to travel to Bangladesh to produce clothing. That year, the international trade quota system known as the MultiFiber Arrangement officially came to an end. Exports of textiles and clothing to developed countries were no longer Faced with strict quantitative restrictions.

Katie Quan, deputy director of the Labor Research and Education Center at the University of California, Berkeley, said that manufacturers have found that Bangladesh and Cambodia have lower production costs than China, especially for European manufacturers, Bangladesh and Cambodia. The cost of transportation to Europe is lower than the cost of transportation between China and Europe.

Consumers can buy more clothes because of cheap clothing. Guan Shaolan said that when I was a kid in the 1950s, the clothing was not as cheap as it is now. I remember we only had three or four sets of clothes. This is already a lot for a girl in a middle-class family. She said that all three of my current wardrobes are full, and this is not enough.

However, when the global labor cost and production pattern suddenly change, it will put enormous pressure on the economy.

In the case of Bangladesh, the orders received by large companies exceeded their production capacity, so these companies have subcontracted more work to SMEs. This subcontracting behavior and the growing role of middlemen in this process has made it even more difficult for retailers to track down exactly which factories are producing their customized clothing, which in many critics also makes retailing Businessmen are more likely to be free from liability for poor working conditions in the factory.

As a result, Bangladesh has quickly become one of the world’s largest garment exporters, but one of the world’s worst industrial accidents has also taken place in this country.

Robert Frank, a professor of economics at Cornell University in the United States, said that if wage levels in other parts of the world rise rapidly and manufacturers are all flocking to a place for production, the economy of this place will obviously be unbearable. Bangladesh The country seems to be a bit like this. He said that the speed with which manufacturing industries are assembled is so fast that there is little time for local adjustment.

The Zara brand clothing was discovered at the latest factory fire scene in Bangladesh last week. Zara's parent company, InditexSA, did not immediately respond to the reporter’s request for comment.

In the recent incidents of a series of factory accidents in Bangladesh, people discovered that retailers such as JCPenneyCo.JCP+2.93%, Benetton, Wal-Mart Stores Inc. WMT-0.49% and Loblaw Cos. Production of clothing.

Many of these retailers, such as JCPenney and Wal-Mart, say that they are gradually giving up on making garments in factories that produce in multi-user buildings. Loblaw said it plans to expand the scale of its factory audit.

Benetton said that a one-time order that it handed over to a factory in the collapsed building in Bangladesh was completed a few weeks ago, and none of the companies that are engaged in production in that building is currently a Benetton supplier.

Mary Park, another customer shopping at the Zara store, said she didn't care where the clothing was bought.

The 27-year-old cosmetics salesman said that I come from China and that manufacturing has always played an active role in China.

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