Your $15 shirt passed through at least 5 countries and dozens of hands before reaching your closet. Here's the full supply chain of a garment — and the economic geography that makes cheap fashion possible.
Educational content only — not personalized financial, legal, or tax advice.
A $15 H&M t-shirt might follow this journey: cotton grown in Texas or India, spun into yarn in Pakistan or Indonesia, woven into fabric in China, cut and sewn in Bangladesh, finished and quality-checked in Vietnam, shipped through Singapore to a distribution center in the Netherlands, then to a store in Dallas. At least five countries. Likely four to six weeks of transit. Forty or more pairs of hands.
The geographic complexity of the garment supply chain is not incidental — it’s the economic engine that makes $15 t-shirts possible. Each step occurs where it can be performed most cheaply relative to quality and reliability, creating a global assembly line built entirely on labor cost arbitrage.
Understanding this supply chain requires connecting the fashion economics overview, Shein and LVMH economics, and EV Subsidies.
Garment manufacturing has migrated repeatedly across 70 years following the same logic: find the lowest-cost compliant labor. The trajectory:
1950s-1970s: U.S. and European domestic manufacturing. Unionized labor, high wages, strong regulations. Sustainable because trade barriers protected domestic producers and consumers expected to pay more for clothing.
1970s-1990s: Japan, then South Korea, Taiwan, Hong Kong. These were the "Asian Tigers" that built export manufacturing industries partly on garments before moving up the value chain to electronics and heavy industry.
1980s-2000s: China becomes the dominant global garment manufacturer. Enormous labor pool, improving infrastructure, stable political environment for foreign investment, and initially very low wages. China at its peak accounted for over 40% of global garment exports.
2010s-present: Rising Chinese wages (garment worker wages in China have risen 300%+ since 2005), geopolitical tension with the U.S. (tariffs under Section 301), and supply chain diversification pressure drive production to Bangladesh, Vietnam, Cambodia, Myanmar, Indonesia, Sri Lanka, Pakistan, Ethiopia, and others. China remains dominant but its share has declined.
Bangladesh is now the world’s second-largest garment exporter after China, with annual exports of approximately $47 billion (2023). Its comparative advantage: the world’s lowest garment worker minimum wage (raised to approximately $113/month in 2023 after protests), a large and experienced workforce of approximately 4 million garment workers (predominantly women), duty-free access to major markets (EU, Canada) under least-developed country trade preferences, and decades of accumulated expertise in garment manufacturing.
Vietnam has been the biggest beneficiary of supply chain diversification from China, with garment and textile exports growing from $7 billion in 2010 to over $40 billion in 2023. The U.S.-Vietnam trade relationship, normalized in 2001, combined with Vietnam’s political stability and improving infrastructure, has made it a preferred alternative to China for many brands.
On April 24, 2013, the Rana Plaza building in Savar, Bangladesh collapsed, killing 1,134 workers and injuring 2,500 more. The building housed five garment factories producing for Primark, Benetton, Mango, and other Western brands. Workers had reported cracks in the building the previous day and been ordered back to work.
Rana Plaza was not an isolated event — it was the most visible manifestation of systemic safety failures in a supply chain built on cost minimization. Two months earlier, the Tazreen Fashion factory fire had killed 117 workers. Multiple fires and structural failures had killed hundreds in the preceding decade.
The aftermath produced real change. The Accord on Fire and Building Safety in Bangladesh — a legally binding agreement signed by over 200 Western brands — committed to factory inspections, required repairs, worker safety training, and complaint mechanisms. Over 1,800 factories were inspected; significant structural improvements were made. The Alliance for Bangladesh Worker Safety (a parallel initiative by North American brands) ran a similar program.
Worker wages, however, remained contentious. The minimum wage at the time of Rana Plaza was $38/month — the subsequent raises to $68 (2013), $95 (2018), and $113 (2023) represent meaningful improvements but remain among the world’s lowest for garment workers. The price pressure from Western brands — who negotiate aggressively on cost — flows through to worker wages and factory safety investment budgets.
The economics of fast fashion distribute costs in ways that make the final consumer price artificially low:
Environmental costs are externalized. The fashion industry produces 10% of global carbon emissions, consumes vast water resources (a single cotton t-shirt requires approximately 2,700 liters of water to produce), and generates enormous textile waste (the Ellen MacArthur Foundation estimates a truckload of textiles is landfilled or burned every second globally). These environmental costs are borne by the global commons, not reflected in the $15 t-shirt price.
Worker subsidy is implicit. Wages of $113/month in Bangladesh are below the MIT Living Wage Calculator estimate of a living wage for Bangladesh ($195-250/month). The gap between the actual wage and the living wage is effectively a subsidy from Bangladeshi workers to Western consumers.
Regulatory arbitrage is structural. Garment production occurs where environmental and labor regulations are least stringent, not where production is most efficient in a fully-costed sense. The cost of compliance with Western environmental and labor standards — if applied universally — would substantially raise garment prices.
This true cost accounting doesn’t necessarily lead to a simple policy conclusion — the garment industry has lifted millions of Bangladeshis, Vietnamese, and Cambodians from subsistence agriculture to wage employment with real income gains. But it does clarify what’s actually being purchased when a $15 t-shirt is bought: not just fabric and thread, but a complex allocation of environmental and social costs that aren’t priced into the transaction.