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Economics

Fast Fashion has an ongoing trend of being successful economically within the retail industry worldwide. The fast-fashion market in 2020 globally produced $25.1 billion. It was expected to increase at an annual compound growth rate (CAGR) of 21.9%, resulting in the global market increase to $31 billion in 2021. By 2030, the fast fashion industry will bring a revenue of $192 billion to the world's global economy. This economic growth from fast fashion is demonstrated through how the fast fashion industries like H&M or Shein strategize in manufacturing. Most fast fashion clothes exporters are from developing countries across Asia, such as India, Bangladesh, Vietnam, China, Indonesia, Cambodia, etc. Developing countries' economy relies on fast fashion consumption as most of their export earnings profit from ready-made clothes. China, for example, has gained a yearly profit of $158.4 billion from exporting ready- made clothes.

Manufacturing

The economic decision for the fast fashion industry to thrive is by producing high revenue through low production costs within their manufacturers in Asia. One low production cost in the fast fashion retail is the investment cost of materials to make a garment. Fast fashion invests in polyester and cotton fabric because they are inexpensive and durable materials. In 2020, polyester's global price per metric ton was $725 U.S dollars (or 32.9 cents per pound), and the global price for cotton in 2021 was 126 cents per pound. According to these statistics, polyester fabric is more affordable than cotton, but both are relativity cheaper than higher quality fabric such as silk or wool. One basic T-shirt would require .5 Ibs of cotton material, resulting in less than $1 of cotton fabric used. Inexpensive materials allow the fast fashion industry to produce a high volume of affordable clothes at a low production cost. Therefore, retailers will profits from selling high volumes of affordable designer clothes by its increased markup price from its material cost.

Wage Criticisms

The fast fashion industry do face economic criticisms of hiring garments workers from developing countries for a low wage. There are more than 60 million workers that produce garments for the fast fashion retail, and 80% of those workers are women. MVO Netherlands researched in 2019 that workers' monthly wages in Ethiopia that manufacture for H&M, Gap, and JC Penny begins at $32, while an experienced worker is $122 a month. In other words, the lowest hourly wage for workers in developing countries is less than .50 cents. In developed countries like the United States, the average garment worker in Los Angeles, reported by the Garment Worker Center (GWC), is about $5.15 per hour despite the federal minimum wage being $7.25 per hour in 2016. Hence, their monthly income would be about $858 (if worked 40 hours a week), which is a much higher salary than in developing countries but still lower than the United States standard of living. To reach the target goal of demands from consumers from the U.S and Europe, garment laborers in developing countries, on average, are expected to work 11 hours a day. Thus fast fashion retail is economically criticize in providing garments laborers from developing and developed countries unlivable salaries while maintaining consumer's demand through long hours of work.