The price of a pair of jeans should be 33 euros higher if the hidden cost are added, according to research of Impact Institute and ABN Amro. Hidden cost are environmental cost, such as water shortage or pollution in areas where cotton is grown and social cost, such as child labor, underpaid workers and unsafe or unhealthy working conditions. All those cost together form the true price gap: all direct external cost that are not part of the price label on your favorite pair of jeans, but that are paid by local communities, future generations or garment workers.
How dirty are your denims?
The fashion industry is the second most polluting industry in the world. And jeans are taking up a big part of that industry. It is estimated that there are 2 billion pairs of jeans sold worldwide each year, with a total retail value of 42 billion dollars. Globally, we own on average 5.4 pairs of jeans. It’s safe to say that it is a BIG market, and as such the impact on both planet and people is huge.
The Impact Institute researched the entire value chain from a typical pair of jeans, where the production of cotton and denim takes place in India, which is then transported to Bangladesh, where the raw materials are transformed into jeans, that are transported to, in this particular case, The Netherlands. If you would study a different value chain, where for example the jeans are made in another country, these numbers might be different. But that’s not the point of this research. This research is an eye opener that shows us that our wardrobes are not only full of fashion, but also of blood, sweat and tears. And it shows us where in the chain the biggest cost are made, so we can do something about it.
The true price gap
True cost pricing is a way of calculating what the real price of a product should be. With true cost pricing all negative external effects – either social or environmental – are being valued and included in the price. For example: the intimidation of garment workers (negative effect) in factories is valued at 10.000 euros per worker. A quarter of the employees indicates that they experience intimidation, so the additional cost per employee is 2.500 euros. If every employee makes 5.000 pairs of jeans per year, the additional cost per jeans is 50 cents.
Based on the research of the Impact Institute and ABN Amro, it is very clear to see that the biggest influence on the true price gap lies within the process of turning cotton into denim (a total true price gap of €21,15 per pair of jeans) followed by the cotton production itself (accounting for €8,40 per pair of jeans). Especially social cost are a major issue in the true price gap and take up two-third of the total amount.
I am a firm believer of measuring impact. If you don’t know where your impact is the highest, how can you improve things? That’s why I also frequently calculate my own carbon footprint to see which actions I can take to lower my individual environmental impact (note: social costs are not included in carbon footprint calculations). The interesting part of the research of Impact Institute and ABN Amro is not that it advocates that the price of a pair of jeans that a retailer – and therefore probably the consumer – pays should literally be 33 euros higher. It aims to visualize where the biggest opportunities are to do things in a more sustainable way, for both planet and people.
For instance, it is estimated that between 200,000 and 400,000 people are employed in the spinning mills in India, where raw cotton is turned into yarn. Many of the workers are young girls that work according to the Sumangali scheme. Under the Sumangali scheme, parents of the girls, usually poor and from the lower castes, are persuaded to sign up their daughter(s) for a 3 to 5 year contract. The scheme promises a certain amount of money after completion of a the contract, which can be used by the parents to pay for the wedding of their daughter. This form of bonded labour, which often involves child labor and bad labor conditions, is a big influence on the true price of a pair of jeans. Simply increasing the price of a pair of jeans by 33 euros would not make this complex issue disappear. As stated by the Fair Wear Foundation, even experienced auditors in mills and factories often overlook the issue, as the Sumangali scheme is to a certain degree, culturally accepted. Paying a living wage is, according to FWF, one of the most effective ways to combat the scheme. Why? Simply because then there’s no need for the factories to “trap” workers to keep up with the required labor force AND the girls would be able to save for their future themselves. Though the implementation might not be that easy, the solution is simple. Think about it yourself: if a company pays a good salary, and the working conditions are good, wouldn’t YOU want to work there?
Closing the true cost gap in the fasion industry
An interesting fact is that it’s probably less expensive to cover the true cost gap than the 33 euros. This research for example concluded that it would only be necessary to increase the price of a cotton t-shirt made in India with 22 cents to lift the cotton workers out of poverty. I am aware of the fact that I am comparing a t-shirt here with a pair of jeans, but since the raw material is cotton in both cases, I am fairly confident to say that it wouldn’t cost that much to pay a sustainable and responsible wage to the people who make our jeans. And wouldn’t you be willing to pay 22 cents more for a t-shirt or a pair of jeans, if you knew that that would give someone a decent life?
What can you do?
As a consumer, you cannot solve this problem alone. Just like 1 jeans brand cannot solve the problem alone. Governments, companies, consumers, research organizations, we all have to take our responsibility. And as consumers we can definitely do SOMETHING. Here are my tips to join the movement towards a fashion industry that’s fair for both planet and people.
- Buy less. As easy as it sounds, with every pair of jeans you buy less, you are avoiding big environmental cost. And it is pretty obvious that the majority of the garment workers did not benefit at all from the increase in demand for jeans. So the “if I buy less, people are falling into poverty” argument doesn’t work for me. Bonus tip: if you need a little support to stop buying clothes, join me and thousands of others for Slow Fashion Summer, starting June 21st!
- Choose sustainable brands. There are jeans brands that are doing things differently. Here in The Netherlands, MUD Jeans and Kuyichi are two examples. I am very interested to learn about sustainable brands in your country. Please share them in the comments!
- Demand transparency and increase awareness. What we don’t know, we cannot change. Send letters, e-mails, post pictures on Instagram or Facebook or sign petitions such as the ones often initiated by the Clean Clothes Campaign. Use #whomademyclothes and #cleanclothes to demand transparency and to increase visibility and awareness.
If you have more tips on how we can work together towards a fair and sustainable jeans industry, share them below this post or reach out to me on Instagram. Looking for even more tips on how to create an ecofriendly wardrobe? These are my favorites!
If you are interested in the full research report, it’s available – in Dutch – here.