How much of the money I spend trickles down to workers? Won't 'clean clothes' be expensive?

published 17-01-2013 13:45, last modified 22-05-2013 23:29
In an estimate of a €100 pair of shoes made in Indonesia, just €0.50 (that's 0.5% of the total retail cost) goes to production workers’ wages.

In contrast, the company makes a profit of €13 (or 13%). Labour costs can vary based on many factors, but total wages are almost never more than 5% of the total retail price.

This is true even for low-price items such as T-shirts offered by budget brands.

So even in an extreme scenario, if a worker’s wages were to double and the cost was passed along directly to consumers, the item would cost only 5% more: your €100 pair of shoes would cost just €105.00.

Alternatively, companies could absorb this negligible increase themselves and the consumer price would remain the same.