MIT Sloan Executive Education Blog

Fast fashion: What's the true cost of a bargain?

fashion waste

American consumers love a bargain. In fact, consumers will often choose a bargain over ideals; this past spring an Associated Press-GFK poll found that, "when it comes to purchasing clothes, the majority of Americans prefer cheap prices over a Made in the USA label." This, despite decades of political rhetoric about the need to bring manufacturing jobs back to America.

But there's a bigger, hidden cost behind our love of a deal—particularly our love of cheap clothing. In today's market, there's no shortage of options for buying amazingly inexpensive, yet trendy clothing, including big box stores, "fast fashion" stores such as H&M and Primark, and off-shore clothing retailers advertising on Facebook. Some of the messaging inherent in these brands is that the items are so cheap, it's OK to purchase them for only one wear. You can buy that novelty sweater for the "ugly sweater holiday party" or any other frivolous clothing item for a one-time event. After all, it cost less than a night out, or even an entrée at many restaurants.

However, the dirty little secret that these retailers, manufacturers, and their supply chains don't share is the true cost of the disposable clothing industry. According to the Environmental Protection Agency, "15.1 million tons of textile waste was generated in 2013, of which 12.8 million tons were discarded." According to MSNBC, "10 percent of the world's total carbon footprint comes from the fashion industry, and apparel is the second largest polluter of fresh water globally."

The fast fashion industry not only generates textile waste, but the economics behind it demand the clothes be produced using massive amounts of cheap material and cheap labor. This means relying on the laborers at the very lowest end of the wage spectrum in countries with few protections for workers. While the fashion industry on the whole is a job creator, many of those equate to low wages, forced labor, unhealthy and dangerous working conditions, and even child labor, which is now rampant through apparel supply chains.

Is the fast fashion industry good for anyone other than those profiting from it? How can we as a society start to put pressure on the retailers and manufacturers to move away from fast fashion?

The long term solution may come down to apparel manufacturers reconsidering their global supply chains. As MIT Sloan Professor David Simchi-Levi pointed out in his Harvard Business Review article, "You Can’t Understand China’s Slowdown without Understanding Supply Chains," "Global companies have realized in the last few years that strategies such as outsourcing and off-shoring have significantly increased risk because their supply chain is geographically more diverse, and, as a result, exposed to all sorts of potential problems.”

For example, a recent explosion at a warehouse in Tiajin that ships hazardous materials was most likely caused by a company culture that flouted regulations—a behavior not uncommon in Asia and other parts of the world. The operational risk and potential disruptions to the supply chain may outweigh the upside of short term profit.

In the meantime, we consumers can choose to re-think where we shop and what we buy. Do we really need that sweater we'll wear once? Is that $13 pair of jeans really a bargain? Or should we pay a little more now for our clothing, with a longer term goal of hoping to make a change in how the apparel industry impacts the environment and the world?

Learn more about the successful and responsible management of supply chains from MIT Sloan Professor David Simchi-Levi in Supply Chain Strategy and Management at MIT Sloan Executive Education.


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