This lesson gathers the key terms of the unit "Economics and Sustainability: The True Cost of Fashion" into four groups, economic, environmental, social and solution terms, and shows how to use them precisely when analysing what a piece of clothing really costs.

Studying the true cost of fashion needs an exact vocabulary drawn from several disciplines. Economic terms such as fast fashion, global supply chain, outsourcing, retail markup, minimum wage, living wage and externality explain how clothes are made so cheaply and who gains. Environmental terms such as water-intensive crop, carbon footprint, synthetic fibres and textile waste describe the damage that prices do not show. Social terms such as child labour, gendered labour and exploitation name the human costs. Solution terms such as slow fashion, circular economy, upcycling, Fair Trade, GOTS, OEKO-TEX, greenwashing, brand transparency and conscious consumer describe ways to respond and how to judge them.

Key Terms: The True Cost of Fashion

The idea at the centre of this unit is that the price of a garment is not its true cost. The true cost also includes environmental and social costs that someone else pays. The terms below give you the precise language to show where those costs fall.

1. Economic terms: how clothes become cheap

• Fast fashion: a business model that produces inexpensive, trend-led clothing quickly and in large volumes, with short production cycles and frequent new stock.
• Global supply chain: the series of stages and places a garment passes through, from raw materials and design to manufacturing, transport and retail, often across several countries.
• Outsourcing: contracting production to other firms, often in countries with lower labour costs.
• Cost breakdown: an analysis of the parts that make up a product's price.
• Retail markup: the amount a retailer adds to the cost price to cover its own costs and profit.
• Minimum wage: the lowest wage an employer may legally pay.
• Living wage: a wage high enough for a worker to afford a decent standard of living, including food, housing, healthcare and education for the family. It is often higher than the legal minimum wage.
• Externality: a cost or benefit of an activity that falls on people outside the transaction and is not reflected in the price, such as river pollution from a dye works.

Using the terms: in the unit's example of a T-shirt sold for USD 5.00, labour receives USD 0.60, which is 12 per cent of the price, while the retail markup is USD 2.50, or 50 per cent. Branding and marketing (USD 1.00) and the retail markup together take USD 3.50, or 70 per cent. A precise sentence would be: "The cost breakdown shows that the retail markup is more than four times the labour cost."

2. Environmental terms: costs the price leaves out

• Water-intensive crop: a crop that needs large amounts of water, such as cotton; an often-quoted estimate is about 2,700 litres for one cotton T-shirt.
• Carbon footprint: the total greenhouse gas emissions caused directly and indirectly by a person, product or industry, measured in carbon dioxide equivalent.
• Synthetic fibres: fibres made from petrochemicals, such as polyester, nylon and acrylic. Washing them can shed tiny plastic fibres into waterways.
• Textile waste: discarded fabric and clothing, both from production and from consumers, much of which is landfilled or burned.

3. Social terms: the human cost

• Child labour: work that deprives children of their childhood, their potential and their dignity, and harms their development.
• Gendered labour: work done mainly by one gender; most garment workers are young women, who often face low pay, harassment and few chances of promotion.
• Exploitation: taking unfair advantage of workers, for example through unpaid overtime or unsafe buildings. The Rana Plaza collapse in Bangladesh in 2013, which killed more than 1,100 garment workers, became a symbol of it.

4. Solution terms: responses and how to judge them

• Slow fashion: an approach that values quality, durability, timeless design and ethical production over quantity and trends.
• Circular economy: a model that keeps products and materials in use for as long as possible by reducing, reusing, repairing and recycling, so that waste is designed out.
• Upcycling: turning waste materials or unwanted products into new items of higher quality or value.
• Certifications: independent labels that check claims. Fair Trade covers fair pay and conditions for producers, GOTS (Global Organic Textile Standard) covers organic fibres with environmental and social criteria across the supply chain, and OEKO-TEX certifies that textiles have been tested for harmful substances.
• Greenwashing: making misleading claims that a product or company is more environmentally friendly than it really is.
• Brand transparency: how openly a company shares where and how its products are made, including its factories and wages.
• Conscious consumer: a buyer who considers the social and environmental impact of a purchase. Fashion Revolution, a movement founded after Rana Plaza, encourages consumers to ask brands "Who made my clothes?"

Why precise terms matter

Saying "workers are paid badly" is vague; saying "wages meet the legal minimum but fall below a living wage" is precise and testable. In an interdisciplinary unit, the right term also shows which discipline you are using: a negative externality is the economist's word for a cost to others, such as the pollution damage that an environmental scientist would describe.