Will You Pay 10 Cents More Per T-Shirt?

t-shirtsLet’s say you have two options to choose from: A T-shirt that has been made using questionable labor practices for $9.90 or a T-shirt in the same quality that has been made ethically for $10.00. What would you choose?

This question might be less theoretical than you think – Bryce Covert reported earlier this week on ThinkProgress that according to an estimate provided by the Worker Rights Consortium, the average consumer would need to pay as little as 10 cents per article of clothing if all of the costs of upgrading Bangladesh factories were passed on to the consumers. In other words, all we need to do to prevent the next tragedy in Bangladesh is to pay extra 10 cents per clothing item. But are we really willing to do it?

I guess the vast majority of you would say yes. After all, we’re only talking here about 10 cents an item so even if you’re a fast fashion junkie it would probably wouldn’t cost you more than 2-3 dollars a month to do the right thing. Nevertheless, if we digg in a little bit deeper we’ll find out that while we might say ‘yes’, the answer would probably be ‘no’, especially when it comes to fast fashion items.

As we mentioned here last week there’s a general belief that customers shopping for cheap fast fashion items are somewhat less sensitive to ethical issues. “Value customers focus on price and are generally less responsive to ethical propositions – particularly those involving faraway problems like worker conditions in Asia or Latin America,” Simon Zadek explains in his 2004 HBR article ‘The Path to Corporate Responsibility.’

I was curious to know if there’s further evidence to this notion, because understanding consumer behavior can make a lot of difference in designing a solution for the problem we’re having with the impacts of fast fashion. Luckily I found great references to relevant studies on a New York Times’ article that actually tried to make the point that there’s a greater consumer interest in the origins of the clothes and preference for sweatshop-free garments.

The first study, “The Socially Conscious Consumer? Field Experimental Tests of Consumer Support for Fair Labor Standards” was conducted by Prof. Jen Hainmueller of MIT and Prof. Michael Hiscox of Harvard. They did their research with Gap Inc. in 111 Banana Republic factory stores, which are outlets offering discounted Banana Republic items. The researchers wanted to find out if labels with information about fair labor standards would make a difference for shoppers in this setting – outlet malls and stores that are known for attracting particularly price-sensitive buyers hoping to find good deals.

What they found out was that “among customers shopping for lower priced women’s and men’s items, labels with information about labor standards (or information about other product attributes besides price) had no statistically significant impact on sales. But the labels had a substantial positive effect on sales among one segment of shoppers – women shoppers interested in higher price items.” In other words, fast fashion customers are more likely to ignore ethical considerations, while shoppers for higher-end garments (in this case it was a women’s linen suit sold at $130) are more likely to be affected by them.

The second study has a great name that actually gives away its results – “Sweatshop labor is wrong unless the shoes are cute: Cognition can both help and hurt moral motivated reasoning.” It was conducted by Profs. Neeru Pahariaa of Georgetown University, Kathleen Vohs of the University of Minnesota and Rohit Deshpandec of Harvard. They wanted to learn why people pay for goods that they know have been made using questionable labor practices, especially when they say the opposite in surveys. “Given that consumers say they care about sweatshop labor and are willing to pay for products that are free of it,” the researchers write, “it remains vexing why there is continued demand.”

Unlike the first study, here the experiments were performed in lab conditions, but the results are no less interesting. One of the main findings was that “though consumers say they care about sweatshop labor and prefer products made without it…self-interested motivation, the availability of cognitive resources, and a flexible moral context limit their ability to turn their feelings into action.”

In other words, as Prof. Pahariaa told the New York Times: “Consumers were concerned with labor practices — as long as they were not that interested in buying a product like shoes. But “if the shoes are cute — if they like the shoes — they actually think sweatshop labor is less wrong.” In addition, she said the complex supply chain in retailing made it easier for consumers to justify poor labor practices. “Most people probably would not hire a child, lock them in their basement, and have them make their clothes, but this system is so abstracted.”

Even though none of these studies investigated the specific 10-cent question, their findings make the argument that we can’t count on fast fashion consumers to make the right decision stronger. If we want to see changes in the supply chain of fast fashion retailers we need to see these companies take responsibility, even if they’re not sure to what degree their consumers will appreciate it. After all, why wouldn’t H&M, Zara, J.C. Penney, Wal-Mart and other fast fashion companies take responsibility and pay the bill? Apparently if they won’t do it, no one will.

[Image credit: swan-t, Flickr Creative Commons]

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and the Parsons The New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.

Raz Godelnik

Raz Godelnik is an Assistant Professor of Strategic Design and Management at the School of Design Strategies at Parsons The New School for Design. His research interests include the convergence of innovation, sustainability, business and design strategies, the sharing economy and sustainable business models such as B Corporations. He is the co-founder of two green startups (Hemper Jeans and Eco-Libris) and a contributor writer to Triple Pundit.