INFOGRAPHIC: What Does That $14 Shirt From Bangladesh Really Cost?

by , 07/16/13   filed under: Worker Rights

Bangladesh, sweatshops, sweatshop labor, sweatshop workers, forced labor, human rights, workers rights, eco-fashion, sustainable fashion, green fashion, ethical fashion, sustainable style, eco-friendly T-shirts, sustainable T-shirts, infographics, MacLean's

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If there’s one positive thing to emerge from the deadly Bangladesh building collapse in April, it’s a growing global awareness of the less-than-humane treatment endured by the South Asian nation’s garment workers. Those rock-bottom prices we’re accustomed to seeing don’t exactly come cheap. According to a 2011 report by O’Rourke Group Partners, a consulting firm based in New York, a generic $14 polo shirt sold in Canada and manufactured in Bangladesh costs a retailer only $5.67. To achieve such low numbers, workers receive 12 cents per shirt—or just 2 percent of the wholesale cost. It’s this glaring inequity that accounts for Bangladesh’s booming garment industry, which is second only to China’s in terms of exports. Below, an infographic, courtesy of MacLean’s, that reveals the average cost breakdown.

Bangladesh, sweatshops, sweatshop labor, sweatshop workers, forced labor, human rights, workers rights, eco-fashion, sustainable fashion, green fashion, ethical fashion, sustainable style, eco-friendly T-shirts, sustainable T-shirts, infographics, MacLean's

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14 Responses to “INFOGRAPHIC: What Does That $14 Shirt From Bangladesh Really Cost?”

  1. justwondering says:

    I wonder if there is a way to figure out what the real expense to the people and the earth is to make this shirt?–$100? What is a McDonald’s $1.00 hamburger real cost to the environment? How much are all our fancy phones really costing the poor people forced to work all hours and the earth in the toxins to make them?

  2. selvatice says:

    Ok… But I just think the way the mark up is calculated is unfair. I think the mark up should be calculated on the cost and not on the price the retailer sells it. 60% on USD 5.67 = USD 9,07. In fact USD 14.00 = 147% on USD 5.67. The T-shirt is sold for almost 2,5 times the cost, not just 60%…

  3. pyriam says:

    Good graph, but there is a mistake in the percentage!
    Consumer price is about 250% of retail price, or a mark up of roughly 150% (not 60%). It’s even steeper than depicted. Would be great if this could be fixed!

  4. tylonius (@Tylonius) says:

    I’d like to a comparison to a similar shirt produced by a company like American Apparel.

  5. smel630 says:

    You did not account for employees salaries at the retailers in your breakdown. They are not making much on these shirts.

  6. kenjones says:

    With such a standard product as a T shirt, the pressure against any upward movement on labour must be the threat to reduce the $0.12 even further by automation. The $3.69 material cost of the T Shirt feeds many fewer mouths than it once did because textile production is totally automated everywhere. 300 years ago most were agricultural workers everywhere, sowing and reaping for a living and there was little more than subsistence consumption anywhere. Today the economy has expanded in an explosion of consumption. However as the economy expands machines take over the work, not only because machines do it so much better and cheaper but because nobody wants to do repetitive or dangerous manual labour. We are undergoing a technical and consumer revolution, which at some stage will level off when everyone on the planet is overweight and has all the consumer toys. The bigger challenge is not manufacturing or even the energy needed, it’s spreading the wealth around to keep the machines running when machines do all the work. One thing for sure, in a hundred years time nobody will be sitting at a sewing machine sewing T shirts one at a time.

  7. gemma says:

    So how does this work with a £3.50 T-shirt from Primark ……

  8. says:

    To begin, so everyone understand, Markup calculation is different from percentage. 50% Markup on cost is same as 100% of cost. Meanwhile, this chart is only comparing cost of good in relation to the retail price of good sold.

    As a US manufacturer, I can agreed with most of the chart with the exception of Factory Overhead, and Factory Margin.

    Assuming a factory produce 100,000 garments a month, the follow will be true:

    1-Factory Overhead is 1% of cost or $7,000 a month. (Rent, energry, fix expenses, etc.)

    2-Agent Commission is 3% of cost or $18,000 a month.

    3-Worker Labor is 2% of cost or $12,000 a month.

    4-Freight/Duties is 18% of cost or $$103,000 per month.

    5-Manufacturer Margin is 10% of cost or $58,000 per month.

    6-Materials is 65% of cost or $369,000 per month.

    7-India workers are paid $0.12 cents per hour. ($38/month working at 10 hours per day)

    8-India factory hired 10,000 workers to produce 100,000 garments in one month. (1 workers can only produce 12 garment a day working 10 hours per day.)

    9-Materials must be very cheap quality.

    10-Factory has very small overhead expense because energy cost will be a big part of the overhead total. (US has the cheapest energy cost.)

    What this chart does not illustrate is that America can’t compete with India. Labor cost alone in America will be more than the entire cost producing in India. That is telling us there is something wrong our government policies which do not encourage fair trade. Meanwhile, (if it is true or even possible) 100,000 workers working in a factory is no way can be safe, especially if it is built poorly.

    ****Buyer beware, looking at the materials cost, there are some issues regarding the quality of the material. In our industry, we always say “you get what you pay for.” The numbers on this chart explain why so many people get skin allergy these days.

  9. carla says:

    some costs were left out, the designer, the patternmaker, the actual manufacturer.

  10. peterhelander says:

    GREAT INFOgrapic, but learn basic math PLEASE! On $5.67 with a markup of 60% it would be $9 not $14.00! Really. Taking $5.67 to $14 is a 147% markup.

  11. poppycock says:

    Lousy infographic.

    A low quality poloshirt ($14 is a low quality shit) can be bought for around 1.50€ materials and all. Shipping and duties would be another 0.50€ (Boat shipping 0.20€ a piece)

    This is if you buy small quantities of around 500-1000 pcs.

    Now if you’re one of the head honchos in the clothing industry and you order up to 100,000 pcs then you can cut down the price another 50%.

    H&M buys their poloshirt made and shipped for around 1,00€.

    How do I know? I buy clothing in Bangladesh, China and Thailand.

  12. capitalmind says:

    So what’s the real issue here? – That merchants can’t make a profit, that workers appear to be paid such small salaries or that the consumer expects something for nothing? Would you pay $20 for the same t-shirt? Do you think a single worker cuts fabric to patterns and hand stitches them all for 12c?

  13. jluthye says:

    Actually this calculation is CORRECT… I know it seems backwards but Markup isn’t how much more a shirt cost.. it is above the cost of the shirt. The real calculation is Markup equals Profit/Cost M = P/ C, So in this example 60% markup would really cost $14.18

    Just thought I would clear that up. I know its a little odd, but that’s how it works.

  14. brooke vlasich says:

    While I realize some elements might be missing, it’s helpful to have an infographic like this to see the actual breakdown. Having a visual is helpful to show people what your final purchase goes to.

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