05/08/2013 02:49 pm ET Updated Jul 08, 2013

What the Fashion Industry Must Learn from the Factory Collapse in Bangladesh

When we meet with emerging designers at Vicaire NY each week, we talk about the importance of producing garments locally. We speak in terms of cost-benefit analysis and how it's critical to bring jobs back to New York. Each time we are asked the same thing, "Isn't it cheaper to produce abroad?"

The most recent tragedy in Bangladesh, killing more than 800 people, is the most glaring answer to that question.

"Cheaper" is relative.
Emerging designers, and the fashion industry in general, feel that the time they spend on developing their designs and sourcing fabric gives them the right to charge upwards of $200 for a dress. They work in clean apartments or studios, with ventilation, lunch breaks, and pour their heart and soul into a design. When someone looks at their garment and says, "Wow, that is overpriced" they huff and puff about how much work they put into it.

Yet, when it comes to producing their line, they search out the cheapest labor possible. At that point, they do not stop to think about how much work someone may be putting into hand sewing the beading on their designs - or what the working conditions might be. They do not ask questions about how those factories abroad are undercutting the competition by over 100% - they just see a final number, and sign on the dotted line.

While it seems "cheaper" to produce abroad, it is actually more costly in the long run. Both in human capital and economic mobility for the designer.

Cheap labor hurts the fashion market by creating a culture of overproduction, which hurts the saleability of designs and leads to fast fashion and blowout sales. Consumers are so inundated by garments that they do not want to pay a premium because they know that there will be left over stock that goes on sale. But cheap labor doesn't just stop there, it also hurts the economic conditions of the factory workers where the garment is made.

With designers looking for the cheapest option, pitting one factory against another, the people that get hurt are the factory workers. Paid at pennies on the dollar, their economic mobility is stunted because the more designers demand cheaper labor, the lower the factory is going to pay them. Factory owners rarely reduce their cut of the total amount charged; they just reduce what they will pay to the factory workers, ignore the conditions of the factories, and do whatever they can to maintain their profit margins. That's why the building collapse in Bangladesh happened. Because factory owners used a structure developed for a mall to house a factory with hundreds of machines weighing much more than the structure could handle. As a result, 800+ human beings died while sewing clothes for brands like Mango.

But that's business, right?
Designers can argue this point by saying they are not running a charity - they are running a business where the bottom line matters. We get that. We run a business and at heart, I am quite the capitalist. In fact, the capitalist in me is the one that finds this culture of overproduction to be damaging to the business of fashion.

The more designers desperately demand "cheap" labor and increase production quantities to meet minimums, the bigger diservice they are doing to their own business model. The overproduced quantities will inevitably go on sale, and consumers know that. There is no need to rush and buy something because it will be gone; it won't be. There is always more.

The fashion industry is broken not because fast fashion exists; it's suffering because designers are beginning to think like they are fast fashion outlets. It's not an easy problem to fix, but the first step is to understand that we are perpetuating our own problems. And others are suffering because of it.