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The allure of ultra-cheap clothing often masks the intricate economic and social factors that enable low prices. While online platforms tempt consumers with dresses priced as low as $5, a growing discourse examines the true cost, particularly when considering domestic production with fair labor practices and quality materials. Expert analyses reveal that ‘Made in USA’ tags could translate to significantly higher retail prices, exposing the hidden costs embedded within the current fast-fashion model.
Calculations based on material costs and prevailing wages in the US suggest a substantial price rise for consumers. A simple dress shirt or blouse, frequently manufactured overseas using inexpensive synthetic fabrics, could retail between $126 and $207 if produced domestically with organic cotton. Similarly, a pair of jeans, a seemingly basic wardrobe item, might cost consumers $234 to $324.
Table: Estimated retail price range for American-made clothing
Garment Estimated retail price ($) Cost drivers Dress Shirt/Blouse $126 - $207 Organic US cotton ($21 material cost), US labor ($18-$45), buttons ($3) Outdoor Jacket $332 - $1,644 Wool/rayon fabric ($70-$395), zipper/snaps ($3.40), complex US labor ($40-$150) Jeans $234 - $324 US denim ($24), hardware ($4), specialized US labor ($50-$80) Evening Gown $594 - $750 Imported silk ($78-$130), highly skilled US labor ($120) Formal Suit $750 - $2,610 Wool/lining fabric ($100-$620), intricate US labor ($150-$250)
Note: These are expert estimations and can vary based on numerous factors.
The stark contrast in potential pricing highlights the significant cost advantages derived from offshore manufacturing, often in nations with considerably lower labor standards and environmental regulations. Investigations, such as the 2022 report by the U.S. Department of Labor on garment factories in Los Angeles, revealed widespread wage violations and unsafe working conditions even within the US.
This underscores that the pursuit of lower costs can lead to exploitative practices regardless of location, although the scale is significantly larger overseas. Reports from organizations like the Clean Clothes Campaign consistently document issues of low wages, excessive working hours, and unsafe environments in garment factories across Asia, contributing to the low retail prices seen in fast fashion.
Tariffs impact on domestic production
The new tariffs on goods from various countries including China, has been argued as a way to incentivize domestic manufacturing (Office of the United States Trade Representative). The intent is to create a level playing field by increasing the cost of imported goods, theoretically making domestically produced items more competitive. However, the effectiveness of tariffs shifting manufacturing back to the US is debated. A 2021 study by the Peterson Institute for International Economics found that while tariffs increased the cost of imported goods for US consumers, they did not lead to a substantial resurgence in domestic manufacturing. Businesses often absorbed some of the tariff costs or shifted sourcing to other low-cost countries.
Reshoring initiative of American Giant
American Giant, a US-based clothing company, provides a contrasting example. Founded on the principle of domestic manufacturing using high-quality materials and paying fair wages, their products command a premium price. Their signature hoodie, for instance, retails for over $100. The company has shown that a segment of consumers is willing to pay more for American-made goods, citing quality, ethical production and job creation as key factors. However, scaling this model to meet the demand of the broader fast-fashion market presents significant challenges in terms of production capacity and cost competitiveness.
Falling domestic manufacturing and supply chain vulnerabilities
The erosion of the US garment manufacturing sector over the past few decades has created hurdles for large-scale reshoring efforts. Numerous domestic factories have closed due to competitive pressures, leading to a falling skilled workforce and a fragmented supply chain. Data from the Bureau of Labor Statistics shows a consistent decline in textile and apparel manufacturing employment in the US since the 1990s. This hollowing out means even if companies wanted to produce more domestically, the infrastructure and expertise are not readily available. Furthermore, the US relies heavily on imports for raw materials like high-quality cotton, silk, and wool, adding complexity and cost to domestic production.
Shifting consumer perceptions
While consumers have become accustomed to low clothing prices, there is a growing awareness of the social and environmental costs associated with fast fashion. Movements advocating sustainable and ethical fashion are gaining traction, suggesting a potential shift in consumer values. However, translating this awareness into widespread willingness to pay significantly higher prices remains a challenge.
Ultimately, the question of how much clothes would cost if made in the US highlights a fundamental trade-off between price, ethics, and sustainability. While domestic production with fair labor and quality materials would undoubtedly lead to higher retail costs, it also offers the potential for a more responsible and resilient fashion industry. At the same time, while challenges exist, targeted policies, consumer demand for ethical products, and strategic business models could play a role in gradually reshaping the landscape of clothing manufacturing. The significant price differential serves as a stark reminder of the true cost of the cheap clothing that dominates the current market.
The assertion that Americans in 2023 spent less than 3 per cent of their annual income on clothing, a significant drop from the 14 per cent seen in the first half of the 20th century, highlights a fundamental shift in consumer expenditure and behavior.
Why the dip in apparel expenditure
There are several reasons for falling household spending on clothing.
The falling cost of apparel: The most significant driver is the decrease in the relative cost of clothing. Tech advancements in textile production, globalization of supply chains, and the rise of mass manufacturing, particularly fast fashion, have made apparel significantly more affordable. As the Bureau of Labor Statistics notes, while overall prices have increased substantially since the early 20th century, apparel prices have risen at a comparatively slower rate.
Rise of fast fashion: The fast fashion business model, characterized by rapid production cycles and trendy, low-priced garments, has fundamentally altered consumption patterns. Consumers can now purchase a greater volume of clothing for a fraction of the cost compared to previous generations. This accessibility leads to frequent purchases but lower overall expenditure as a percentage of income. McKinsey reports that fast fashion retailers like Shein and Temu are now primary online fashion marketplaces in the US.
Shifting consumer priorities: Consumer spending patterns have evolved, with a larger share of the budget now allocated to other categories such as technology, travel, entertainment, and experiences. As costs have fallen, this has resulted in apparel and services accounting for just 2.6 per cent of the total average annual expenditure of $77,280 for US consumer units in 2023, as detailed in the Consumer Expenditures Survey by the U.S. Bureau of Labor Statistics. This figure underscores the shift when compared to the early 20th century. The table below provides a broader view of how apparel spending fits within the overall consumer expenditure landscape in 2023:
Table: Consumer Expenditures Survey, 2023, by the U.S. Bureau of Labor Statistics
|
Expenditure Category |
Average Annual Expenditure |
Percentage of Total Expenditure |
|
Total Expenditures |
$77,280 |
100.00% |
|
Housing |
25,498 |
32.90% |
|
Transportation |
13,148 |
17.00% |
|
Food |
9,986 |
12.90% |
|
Personal Insurance and Pensions |
9,597 |
12.40% |
|
Healthcare |
6,192 |
8.00% |
|
Entertainment |
3,635 |
4.70% |
|
Apparel and Services |
$2,041 |
2.60% |
|
Cash Contributions |
2,394 |
3.10% |
|
Education |
1,627 |
2.10% |
|
Alcoholic Beverages |
597 |
0.80% |
|
Tobacco Products and Smoking Supplies |
214 |
0.30% |
|
Personal Care Products and Services |
950 |
1.20% |
|
Reading and Educational Materials |
134 |
0.20% |
|
Miscellaneous |
1,267 |
1.60% |
This data highlights while apparel is a necessary expenditure, it now constitutes a relatively small portion of the total household budget compared to essential categories like housing, transportation, and food. This reinforces the idea that the declining percentage of income spent on clothing is not just due to lower costs, but also a reflection of evolving spending priorities
Increased durability and versatility: While fast fashion emphasizes trendiness over longevity, there's also a growing segment of consumers prioritizing durable and versatile clothing items. Investing in higher-quality, timeless pieces can reduce the need for frequent replacements, thus lowering overall expenditure over time.
Growth of the second-hand market: The growing resale market for apparel, led to by sustainability concerns and the desire for unique or discounted items is also impacting new clothing sales. Platforms like Poshmark and ThredUp are gaining popularity, offering consumers an alternative to purchasing new apparel and redirecting spending within the fashion ecosystem. By 2028, the US secondhand market is expected to be worth $73 billion.
Impact of online retail: E-commerce has revolutionized how consumers shop for clothing. The convenience and competitive pricing offered by online retailers have intensified price competition and potentially lowered the average transaction value for apparel. While online apparel sales have grown, the ease of comparison shopping can lead consumers to seek out the best deals, thus impacting overall spending. In 2023, apparel online sales and increased, a significant portion of total sales.
Changing consumer behavior
The decline in apparel expenditure reflects several shifts in how consumers approach fashion. While fast fashion encourages frequent purchases, a counter-trend emphasizes quality, durability, and sustainability. Consumers are increasingly conscious of the environmental and social impact of their clothing choices and are willing to invest in fewer, better-made items.
Millennials and Gen Z, in particular, are prioritizing spending on experiences like travel, dining, and entertainment over material possessions, including clothing. While consumers, especially younger generations, engage in online fashion browsing for inspiration, actual spending can be more need-based due to economic pressures and a focus on value. In the first quarter of 2025, a significant percentage of consumers planned to cut back spending on discretionary categories like apparel.
Also, post-pandemic lifestyle changes have led to sustained demand for comfort-based clothing like loungewear and activewear, which may have different price points and replacement cycles compared to more formal attire. With rising costs in essential categories like food and utilities, consumers are more price-conscious when it comes to discretionary spending, including apparel. Many are engaging in "trade-down" behavior, opting for lower-priced brands or delaying purchases.
Future outlook
The future of apparel expenditure in the US is likely to be shaped by a continuation of current trends, with some potential nuances. For example, e-commerce will remain a dominant channel for apparel purchases, and the second-hand market will see further growth as sustainability concerns grow and consumers seek more affordable options. Demand for sustainable and ethically produced clothing is expected to increase, potentially influencing pricing and consumer choices. Brands that prioritize transparency and eco-friendly practices may gain a competitive edge.
Fluctuations in the economy, inflation rates, and consumer confidence will continue to play a significant role in discretionary spending on apparel. Recent data from early 2025 indicates a slowdown in clothing and accessories spending, reflecting broader economic caution. Tech advancements will enhance the online shopping experience and potentially influence spending patterns. And the traditional fashion calendar will become less relevant, with a greater emphasis on seasonless and versatile collections that cater to year-round needs.
To address the significant demand for cotton in the nation’s textile industry, the Bangladesh Government plans to classify domestically produced cotton as an agricultural product.
As per experts, this long-sought recognition will unlock crucial financial support for cotton farmers and transform the sector by encouraging cultivation on currently underused land. Md Fakhre Alam ibn Tabib, Executive Director, Cotton Development Board (CDB), emphasizes, the heavy reliance of Bangladesh on cotton imports adds more pressure on the foreign exchange reserves besides exposing the textile industry to geopolitical risks.
To counter this, the government aims to expand cotton cultivation to 200,000 hectare by 2050 from the just over 45,000 hectare in FY23-24. This expansion is projected to fulfill up to 20 per cent of the nation's total cotton needs. Domestic cotton production reached about 205,421 bales in FY24.
The Bangladesh Textile Mills Association (BTMA) estimates the country's annual cotton demand to be around 8.5 million bales.
The government aims to utilize unused or underutilized lands, such as riverine islands (‘chars’), drought-prone areas (‘barinds’), hilly regions, and even certain fruit orchards, for cotton cultivation, without negatively impacting food production, according to Tahib.
Classifying cotton as an agricultural product will enable farmers to access subsidized loans at a 4 per cent interest rate, similar to other import-substituting crops, Tahib adds. This policy support will increase their access to low-interest loans and encourage broader participation, including contract farming, he states further.
According to experts, this policy will have a multifaceted positive impact on the rural economy, agriculture, and the textile industry, a cornerstone of Bangladesh's economy.
The Central Government has approved an Rs 2,100 crore PM Mega Integrated Textile Region and Apparel (PM MITRA) Park in the Dhar district of Madhya Pradesh. The project will prove to be game-changer for the state’s industrial landscape and boost India’s global textile presence, says Dr Mohan Yadav, Chief Minister.
Located strategically in Bhainsola village, Badnawar tehsil, the park is well-connected to Indore, the Pithampur industrial cluster, and the Delhi-Mumbai Expressway via Ratlam. Situated 452 km away, the Hazira port provides access to international trade routes.
The state government has already received proposals worth Rs 10,000 crore from various companies to set up their textile units in the park. The PM MITRA Park will boast state-of-the-art infrastructure, including a 20 MLD Zero Liquid Discharge (ZLD) plant, a solar-powered energy facility, plug-and-play Built-To-Suit (BTS) units, and residential complexes for workers.
The ambitious timeline targets completion of all construction activities within 14 months, suggesting the park could be operational by the last quarter of 2026.
A key focus of the PM MITRA Park will be to enhance the utilization of cotton produced within Madhya Pradesh, which is the fifth-largest cotton-growing state in the country. The park will not only focus on garment manufacturing but also encompass the entire upstream textile value chain, including spinning, weaving/knitting, and dyeing and processing. This integrated approach aims to boost cotton consumption within the state and reduce its reliance on supplying raw cotton to neighboring states.
Madhya Pradesh is expected to produce 19 lakh bales (of 170 kg each) of cotton during the current 2024–25 season, maintaining its output despite an anticipated decline in India's total cotton production. While output in the central cotton-producing zone, which includes Madhya Pradesh, Maharashtra, and Gujarat, is projected to decrease, Madhya Pradesh's steady production, coupled with the establishment of the PM MITRA Park, signals a promising future for value addition and economic growth within the state's textile industry.
The American Apparel & Footwear Association (AAFA) has submitted a petition to the US Federal Trade Commission (FTC), urging it to allow digital labeling on clothing as a modern and eco-friendly alternative to traditional physical labels. The initiative is being endorsed by brands and associations including the US Fashion Industry Association (USFIA), Ralph Lauren, Patagonia, the Italian Footwear Manufacturers Association (IFMA), the U.S. Chamber of Commerce, and GS1, a global standards organization.
According to the AAFA, the current labeling system is outdated and no longer meets consumers’ expectations for accessible care instructions or comprehensive product information. The group emphasized that the proposal is not to eliminate physical labels entirely, but to give manufacturers the option to use digital labeling, such as QR codes or URLs, as a supplement or alternative.
Digital labels offer multiple advantages, including the ability to display easy-to-understand care instructions in multiple languages, including audio options for accessibility. These labels are also more durable and less likely to be removed, ensuring continued access to important product information. Additionally, reducing the use of label tape would help lower the industry's carbon footprint.
An early adopter, Ralph Lauren began implementing digital care labels in 2019. These labels feature scannable QR codes linked to detailed product information. The company reports that over 400 million of its products now carry a Digital Product Identity (DPID), supporting transparency and sustainability throughout a product’s lifecycle—from resale and repair to recycling.
The brand noted that current care labeling rules have resulted in “label creep,” with large, uncomfortable tags filled with small text and symbols. Ralph Lauren and others argue that digital alternatives could reduce waste while improving convenience and accessibility for consumers.
The public comment period for the petition has closed. The FTC has 180 days from the end of that period to respond. If no action is taken during that time, the AAFA may request a status update, which the FTC is then required to provide within 30 days.
The Palamu administration aims to revive the inactive Koyel Aajivika Apparel Park in Chainpur through a public-private partnership (PPP) model, informs Md Shabbir Ahmad, Deputy Development Commisioner (DDC). Non-operational for over two years, the facility is slated for a significant turnaround under this new initiative.
According to Md Shabbir, Ahmad, Deputy Development Commissioner (DDC) says, the administration will soon issue tenders to attract both new life into the facility, which played a vital role during the Covid-19 pandemic.
The apparel park currently houses approximately 150 idle machines, including specialized button and hole-making equipment. An estimated investment of Rs 4-5 lakh (approximately $5,300 to $6,600) is needed to restore the facility to working order. The Jharkhand State Livelihood Society has been tasked with overseeing this rehabilitation process.
Established in 2019 under the leadership of Shantanu Agrahari, former District Collector, the park gained prominence during the pandemic by manufacturing thousands of protective masks and hand sanitizers. Initially priced at Rs 20 (approximately $0.27 USD) each, were later distributed free of charge following intervention by Chief Minister Hemant Soren. At its peak, the park employed over 200 women workers, becoming a significant contributor to female workforce participation in the region.
This revival initiative is particularly important given Jharkhand's low rate of women in the labor force, which is just over 10 percent, seven percentage points below the national average. District Collector Shashi Ranjan has expressed a strong commitment to revitalizing the facility to boost women's employment opportunities in the region.
The administration plans to implement a ‘local-first’ employment policy, aiming for 90 per cent local workforce participation, with the remaining 10 per cent reserved for specialized roles such as sewing machine technicians and master fabric cutters.
However, the facility faces significant hurdles, including an outstanding electricity bill of 20 lakh rupees (approximately $26,500 USD), which recently led to a power disconnection by the Jharkhand Bijli Vitran Nigam (Jharkhand Electricity Distribution Corporation).
Skechers has entered into a definitive agreement to be acquired by investment firm 3G Capital in an all-cash transaction valued at approximately $9.4 billion.
According to the terms of this deal, 3G Capital will purchase Skechers for $63 per share, representing a 30 per cent premium over the brand’s recent stock price. The deal has received unanimous approval from the Skechers board of directors and is expected to close in Q3, FY25, pending regulatory approvals and customary closing conditions.
Founded in 1992 as a men’s footwear label, Skechers has grown into the third-largest footwear company in the United States. The brand went public in 1999 and made its debut on the Fortune 500 list in 2023, highlighting its rapid growth and strong market presence over the past three decades.
The acquisition comes at a pivotal time for both Skechers and the broader footwear industry. In April, the company reported record-breaking Q1, FY25 revenue of $2.41 billion, marking a 7.1 per cent Y-o-Y. However, despite the strong performance, Skechers withdrew its 2025 financial guidance, citing ongoing uncertainty in global economic conditions and trade dynamics.
Robert Greenberg, Chairman and CEO, Skechers will remain at the helm following the acquisition. He reaffirmed the company’s commitment to innovation and expressed optimism about the future with 3G Capital as a strategic partner.
Founded in 2004 as a spin-off of Brazil’s GP Investments, 3G Capital is well-known for its investments in major consumer brands such as Anheuser-Busch InBev and Kraft Heinz. Co-founders Alex Behring and Daniel Schwartz describe Skechers as ‘an iconic, founder-led brand with a proven history of creativity and innovation.’
During a cabinet meeting at the White House attended by President Donald Trump on April 30, Lori Chavez-DeRemer, US Labor Secretary announced the cancellation of a project focused on improving transparency and labor practices within Uzbekistan's cotton industry.
Having commenced in August 2022, the now-canceled Uzbek cotton project was originally slated to continue through 2026. It received $2 million in its initial year, with an additional $1 million earmarked for 2025. The project's aim was to enhance labor conditions and prevent forced labor within Uzbekistan’s cotton sector, while also assisting workers and employers in meeting international standards.
Uzbekistan’s cotton industry has faced significant international criticism for its historical systemic use of forced labor. However, in recent years, the Uzbek government has implemented reforms and established stringent monitoring systems to address these concerns, often with the support of international partners.
These efforts have led organizations like the Cotton Campaign to end their call for a global boycott of Uzbek cotton. Furthermore, the industry is undergoing modernization through privatization and investments in technology, with the goals of increasing efficiency and sustainability.
A prominent player in the synthetic fiber market with over three decades of manufacturing expertise, Filatex India is significantly expanding its production capabilities and sustainable practices through strategic investments of Rs 320 crore. These investments position the company to lead the next phase of growth in India's synthetic fiber sector while meeting the evolving demands of the global textile supply chain.
A key component of this expansion includes the significant increase in production capacity at Filatex's Dahej facility. This project involves the addition of 19,800 mtpa of partially oriented yarn (POY), 28,800 mtpa of fully drawn yarn (FDY), and 14,400 mtpa of draw textured yarn (DTY). With a total investment of Rs 235 crore, these new facilities are set to be commissioned by August 2026. This expansion will help strengthen Filatex’s position as a leading integrated polyester yarn producer in India, aligning with increasing domestic and international demand for synthetic fibers.
Demonstrating a strong commitment to sustainability and efficient energy use, Filatex’s board has also approved an Rs 85 crore Steam Power Distribution Project. Fully funded through internal accruals and expected to be commissioned by April 2026, this initiative will utilize approximately 70 tons per hour (TPH) of surplus steam from the company's captive power plant to supply nearby smaller businesses. This project is projected to generate annual savings of around Rs 60 crore and fosters collaboration within the local industrial community.
In the FY25, Filatex registered a robust revenue of Rs 4,252 crore and an EBITDA of Rs 258 crore. The company’s profit after tax increased by 22 per cent Y-o-Y to Rs 135 crore. Its annual manufacturing capacity reached 410,040 mt, supported by strong operational efficiency.
Filatex offers a diverse product portfolio, including POY, FDY, DTY, polypropylene yarns, polyester chips, and narrow woven fabrics, catering to a wide range of applications across apparel, home textiles, healthcare, and industrial uses. The company is also driving innovation and sustainability through its ‘Ecosis’ initiative, India’s first textile-to-textile circular recycling solution.
Trutzschler India has inaugurated its cutting-edge manufacturing facility in Sanand, near Ahmedabad, Gujarat, marking a significant milestone in its growth journey. The new plant replaces its earlier site in Ahmedabad and aims to boost operational efficiency, sustainability, and innovation for both domestic and international markets.
The inauguration ceremony was attended by Chief Minister of Gujarat Bhupendra Bhai Patel, Germany’s Consul General Achim Fabig, and Member of Parliament Parshottam Ji Rupala, alongside the Trutzschler and Schurenkramer families, the Trutzschler Group management, and CEO of Trutzschler India, Joseph Thomson. A large gathering of customers, partners, and employees joined the event, which featured inspiring speeches, networking, and a cultural program.
Spanning 164,000 square meters with a built-up area of 72,000 square meters, the new plant employs over 1,000 people. It is equipped to manufacture spinning preparation machines, card clothing, and nonwoven equipment, supporting both Indian and global demand. The facility has been designed with strong sustainability credentials and is targeting a gold rating from the Indian Green Building Council. It is also certified under ISO 9001:2008, ISO 14001:2015, and ISO 50001:2018 standards.
Sustainability features include solar panels, rainwater harvesting, electric vehicle charging points, and AI-driven process optimization. Additionally, the plant houses a new Customer Training Center and an expanded Trutzschler Training Academy, supporting the Skill India Mission.
CEO Joseph Thomson emphasized the plant's role in meeting rising market demands with advanced, eco-conscious technology, expressing gratitude to all stakeholders involved in bringing the project to life.
