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How Money Works

The $5 T-Shirt: Who Really Pays?

Ages 10–14 25 min read Intermediate

You can buy a t-shirt at Kmart for $5. Five dollars. That's less than a coffee. But think about everything needed to make that shirt: growing cotton, harvesting, spinning thread, weaving fabric, dyeing, cutting, sewing, packing, shipping it halfway around the world.

How can all of that possibly cost $5? The answer: someone, somewhere, is paying the rest.

Who Pays the Real Price?

The Workers

Most cheap clothing is made in Bangladesh, Vietnam, Cambodia, or Myanmar. Garment workers in Bangladesh earn approximately $95 USD per month (Clean Clothes Campaign, 2023) — about $3 per day. Many work 12-14 hour shifts in unsafe conditions.

In 2013, the Rana Plaza factory in Bangladesh collapsed, killing 1,134 workers. They were making clothes for Western brands. Workers had reported cracks in the building the day before. They were told to come in anyway.

The Environment

The fashion industry produces 10% of global carbon emissions — more than international flights and shipping combined (UNEP, 2019). Growing cotton requires enormous amounts of water: a single t-shirt needs approximately 2,700 litres (Water Footprint Network). Synthetic fabrics (polyester) are made from petroleum and shed microplastics when washed.

The Landfill

Australians discard approximately 800,000 tonnes of clothing per year — about 23kg per person (Australian Fashion Council, 2023). Most goes to landfill. "Fast fashion" is designed to be worn a few times and thrown away.

The Externality Problem

Economists call these hidden costs "externalities" — costs that aren't included in the price tag. The $5 t-shirt costs $5 because the environmental damage, worker exploitation, and waste disposal costs are paid by someone else.

If the true cost of production — including fair wages, safe conditions, and environmental cleanup — were included, that $5 shirt would likely cost $25-40.

Tonight's Question

"If you knew a $5 t-shirt was made by someone earning $3 a day in unsafe conditions, would you still buy it? What if it was the only shirt you could afford?"

This isn't a simple question. Cheap goods matter to families on tight budgets. Discuss the tension.

Wardrobe Investigation

  1. Each person picks 5 items from their wardrobe.
  2. Check the label: where was it made?
  3. Plot the countries on a world map.
  4. For each country, research: what's the average garment worker wage?
  5. Estimate: how many minutes of work did it take a garment worker to earn enough to buy the shirt they made?

Go Further

  • Documentary: The True Cost (2015) — the full story of fast fashion.
  • Research: Look up "ethical fashion brands Australia" and compare their prices to fast fashion.
  • Website: Good On You (goodonyou.eco) rates fashion brands on ethics.
  • Question: Should governments ban imports made with exploitative labour?

What We Simplified

  • Not all cheap clothing is unethical. Some companies have efficient supply chains that reduce costs without exploitation.
  • Garment work provides income. While wages are low by Australian standards, these jobs are often the best available in developing countries. Boycotting could hurt workers more.
  • The solution isn't simple. Buying expensive doesn't guarantee ethics. Some luxury brands also use exploitative practices.

Sources

  • Clean Clothes Campaign (2023). "Garment Worker Wages." Link
  • UNEP (2019). "Fashion's Tiny Hidden Secret." UN Environment Programme.
  • Water Footprint Network. "Product Water Footprints." Link
  • Australian Fashion Council (2023). "National Clothing Product Stewardship Scheme."
  • International Labour Organization (2013). "Rana Plaza: 10 Years On."

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