[Yes, if I'm a famous-name artist, and can get $10,000 for a pencil-on-paper sketch that cost me $5 and 10 minute to produce, that's fine. But...]
Reading the article... BusinessInsider's headline has little to do with the prosecutor's government's stated concerns:
> In probes through March and April, investigators found evidence that workers were sleeping in the facility so bags could be produced around the clock, Reuters reported. They also tracked electricity-consumption data, which showed work was being carried out during nights and holidays, the report said.
> The subcontractors were Chinese-owned firms, prosecutors said. They said most of the workers were from China, with two living in the country illegally and another seven working without required documentation.
> The probe also said safety devices on gluing and brushing machines were removed so workers could operate them faster.
> The prosecution said violating labor rules was a common industry practice that luxury giants relied on for higher profits.
> "It's not something sporadic that concerns single production lots, but a generalized and consolidated manufacturing method," court documents about the decision to place Dior under administration said, according to Reuters.
> "The main problem is obviously people being mistreated: applying labor laws, so health and safety, hours, pay," Fabio Roia, the president of the Milan Court, told Reuters earlier this year. "But there is also another huge problem: the unfair competition that pushes law-abiding firms off the market."
Normally, I'd assumed that "famous brands used sub-contractors to do the dirty work" ==> "famous brand gets off with a slapped wrist". But the third subtitle:
> Judges placed Dior and Armani units under judicial administration for one year.
I think the price matters insofar as they clearly have the revenue to produce quality goods safely. But they'd rather inflict human misery on people to save 0.4% of the retail cost.
There's not enough actually rich people around to explain the revenue these brands make. It's not rich people for the most part, just people who want to appear rich.
These brands exist to separate the 100k-200k household income demographic from their disposable income, and maybe some other demographics from money they didn't really have in the first place.
Most people who have money and manage to hold on to it have more sense than buying an overpriced low-quality bag that telegraphs they're a sucker.
You obviously havnt heard of ex-Malaysian Prime Minister's wife bag collection. There are rich or super rich people with habits like a drug addicts buying up these branded goods. Is basically like YTers getting patreon patrons. They dont need millions of followers. They just need 1000 hardcore fans that pay them monthly.
> Normally, I'd assumed that "famous brands used sub-contractors to do the dirty work" ==> "famous brand gets off with a slapped wrist".
Typically licensees work very hard to gain the licensing to manufacture for a brand. And the licensor has requirements like regular inspections for work conditions, that the licensee typically pays for, because they don't want publicity like this to damage their brand.
Without knowing the details I could guess that Dior wouldn't have wanted whichever factory they hired to shirk their guidelines. But, Eastern and Western norms for work conditions are very much different and getting Easterners to follow Western guidelines is quite difficult no matter how much you're willing to pay. In many cases factories put on a show for the inspector. Once he/she returns to their home country, the factory returns to its regular operating conditions, which are usually just normal work conditions for their country.
Globalism is the greatest thing to ever happen to the slave trade. It pretty much put the “problem” away from people’s eyes.
Now no one sees the insane conditions and “salary” that is being paid. No need to own anybody, just pay them $10 a day at some foreign country. Works out cheaper as well.
> The subcontractors were Chinese-owned firms, prosecutors said. They said most of the workers were from China, with two living in the country illegally and another seven working without required documentation
This is how almost all "Made in Italy" clothing products are produced.
Local Italian governments made SEZs where garment manufacturing would occur but with no oversight from labor inspectors.
You'd have a bunch of small shops do piece work that was outsourced by the brands, and these small shops were largely Wu dialect speakers due to the mass migration from Zhejiang back in the 90s.
It's been reported on for decades but no one cared [0][1][2].
Italy has a massive shadow economy powered by laborers trafficked from China (garments), India (dairy), Sri Lanka (garments), etc.
30 years ago it would have been Albanians, Yugoslavians, Romanians, or Poles but they'd rather go to Germany which has been developed much longer than Italy (Italy's HDI in the early-mid 1990s was comparable to Mexico, China, Thailand, and Serbia's HDI today)
Idk I been to a dairy farm in central Italy, the margins aren’t that great for the farmer. He was mostly self employed working literal 10+ hour days. The supermarkets get most of the cut.
He explained getting a worker trained and then paying them wasn’t feasible.
You can't justify leaving migrant workers to literally die due to workplace accidents and not taking them to get medical care [0][1]
This has been an issue for decades in Italy.
While Italy might be in Europe, it's rule of law and lack of support for those at the bottom rung of society is comparable to (not much) poorer Eastern European peers like Czechia.
See the comment above, the price revelation is a side effect of an investigation into labor law violations.
In the meantime, in a rational market, a product commanding a 50x markup would quickly have its price driven down by competitors, which is more evidence that our markets are dishearteningly irrational. Profit represents market inefficiency.
There is no crisis where markets don't supply handbags for less than $2k.
Similarly, Markets are not a monolith so this doesn't prove anything about markets in general. Economics is a broad science which works to establish a model of commerce, with varying degrees of accuracy and utility.
Profits are not an inherently bad thing or dirty word. It just means that surplus value was created by a transaction, and workers can profit too
Profit as intended means producer surplus. Economic theory predicts producer surplus reaching 0, while consumer surplus getting maximized. That is what competition does. It does tell everything about markets. This does not happen because of IP doctrines, which distorts competition. And advertising, which causes information asymmetries.
Something else that should be prosecutable is having a headline that so misleads the reader from that actual content that people are able to make comments like yours in online forums
Strictly speaking it's a directive, which the member states have to implement as law. And from what I can tell it only goes in effect in 2027. Of course, no one is stopping Italy from implementing it early.
Notably, the price tag does not even include the raw material. Which makes it an even weirder headline. But then it’s BI, which is not exactly known for quality or reporting.
Gomorrah (Gomorra), book by Roberto Saviano explains fashion brands business like this in detail (among others). Highly recommend, though sometimes quite depressing read.
This is one of the reasons I don't understand seemingly hysterical reactions to the existence of counterfeit goods (when they're being sold at prices that no one in their right mind would believe are for originals).
I've read more than a few articles intimating that counterfeit goods fund terrorism.
Funny how the originals fund human trafficking and breaches of safety laws and human rights violations and the illegal employment of child workers.
From Wikipedia: “Bernard Jean Étienne Arnault (born 5 March 1949) is a French businessman, investor and art collector. He is the founder, chairman and CEO of LVMH, the world's largest luxury goods company. Arnault is the third richest person in the world, with an estimated net worth of US$194 billion as of July 2024, according to Forbes.”
A few months ago something similar also happened to the fashion brand Alviero Martini who was found to be inert in regard to checking the supply chain of their products and whose subcontractors paid the laborers per piece (which is illegal in italy and it was a ridiculously low amount of money)
Worth to note that Alviero Martini most famous products, the ones with printed maps design, aren't even made in leather but in synthetic leather, yet when you google them you find the page header as "borse in pelle da donna" (women leather bags) when most of them are synthetics and just a few of them are in part or in most part leather. I just realized this and it adds another layer of scummyness lol
I'm surprised they even cost that much to produce. Is this surprise to anyone? Even the people paying retail prices have known for some decades how this works.
It's no less disgusting that they put human beings through what they do in order to squeeze every last penny out, and as a society we should stigmatise high price brands.
It only devalues the brand if you lower the price or the quality drops below a critical threshold. There are a lot of people with money but no ability to gauge quality in something like clothes. That's not very surprising since modern society is hyper-specialized. I know nothing about sewing or fabrics so I can't gauge quality in clothes beyond basics like "feel" either.
Lowering the price, on the other hand, signals that the brand is now lower quality or less exclusive. Everyone understands that.
Feel and hand can be deceiving too due to resins and coatings that might be applied to the yarns to make them softer, although they might be eventually washed away and/or give poor breathing properties. I've found reddit and even moreso styleforum to be of help when needing to evaluate the quality of a brand. Although at a certain price point you get improvements that aren't really perceivable such as mother of pealr buttons, i'd rather get a custom shirt than pay more for a ready to wear shirt with MoP buttons that fits poorly due to me being short and thin but slightly muscular in the shoulders
High quality Chinese sweat shop products. I feel like many rich hardly care about labour conditions as long as quality fine and branding legimitate considering they're the ones enforcing said conditions.
Digging into it a little, it looks like the Reguzzoni-Versace-Calearo law passed in Italy in 2010 to allow labeling products "Made in Italy" if at least two major assembly steps took place in Italy. This was itself a reaction to the prior lack of regulation around this labeling, which saw makers use Eastern Europe and China as far back as the 90s and stamp Made in Italy on the goods.
I'd say give or take it's been happening for as much as 30 years, if not longer.
My sweet hearted learning-disabled younger brother, who at the age of 41 stills lives with mom and pushes shopping carts for a living, is actually an expert at identifying and pointing out marketing tropes and techniques. Have to be when you are paid minimum wage in a world that is constantly trying to leverage you.
There is some sort of stingy pleasure at spending slightly more money than you can afford. That's why the secretary will buy the hermes scarf, the nerd will buy the overclocked super-XXL computer that will hardly make a difference. Serious question: how do you get that pleasure when you have millions in excess cash? Come luxury brands, art dealers and other conmen who will provide them satisfaction, and achieve the socially useful role of recirculating that excess cash in the economy.
Apparently people with or without money do not care to research if the expensive thing they want to buy is actually a decent product. As long as these people will exist this business model will follow
"At least the car does something." "The bag may not do something, but at least it's an actual physical object." "The cryptocurrency may not be physical, but at least you can spend it." "The NFT may be undependable and freely duplicable, but at least there's a block chain record identifying your one as the real one." What comes next? Perhaps pay to download a photo of a printed receipt that says you own a jpeg?
> What comes next? Perhaps pay to download a photo of a printed receipt that says you own a jpeg?
The bottom is gacha games, which make billions annually, and are growing year-over-year with no end in sight. It's like a slot machine, except at least a slot machine has a theoretical chance of having a material payout. It's like Counter Strike skins, except at least Counter Strike skins can be sold to other players. It's like NFTs, except at least NFTs represent a notion of "ownership" that could theoretically survive the death of the issuing party. Gacha games are the worst of all worlds--gambling for jpegs that are neither transferable nor durable--and are the logical endpoint of the race to the bottom (well, maybe a slot machine that directly injects carfentanyl into your veins would be worse).
No, nor does it even include materials. That’s just the labor cost. The labor is almost certainly exploited, overworked in unsafe conditions, and underpaid. But still, terrible headline.
While it is not sold at cost, you might say you could trust ferrari in using high quality material and paying workers a liveable wage, while fashion brands that don't do all of this might have absurd markups such as 10x/20x [1] while clothing industry markups are about 2/2.5 [2]
Or they wouldn't cost this little if the workers weren't exploited.
How can people look into the costs and think: "it's fine, these people don't deserve compensation for their work. You know who worked hard, the shareholders. Yes, the $2000 profit should go to them."
Since pretty much everybody does that the problem is not with action of any single company. And the problem won't be fixed by actions of any single company. Let alone voluntary action.
Exactly 57$ is already quite costly in comparison. 57$ in production would retail for at least 300$. And you can’t sell a bag cheap if your brand is demanding very high prices.
Reading the article... BusinessInsider's headline has little to do with the prosecutor's government's stated concerns:
> In probes through March and April, investigators found evidence that workers were sleeping in the facility so bags could be produced around the clock, Reuters reported. They also tracked electricity-consumption data, which showed work was being carried out during nights and holidays, the report said.
> The subcontractors were Chinese-owned firms, prosecutors said. They said most of the workers were from China, with two living in the country illegally and another seven working without required documentation.
> The probe also said safety devices on gluing and brushing machines were removed so workers could operate them faster.
> The prosecution said violating labor rules was a common industry practice that luxury giants relied on for higher profits.
> "It's not something sporadic that concerns single production lots, but a generalized and consolidated manufacturing method," court documents about the decision to place Dior under administration said, according to Reuters.
> "The main problem is obviously people being mistreated: applying labor laws, so health and safety, hours, pay," Fabio Roia, the president of the Milan Court, told Reuters earlier this year. "But there is also another huge problem: the unfair competition that pushes law-abiding firms off the market."
Normally, I'd assumed that "famous brands used sub-contractors to do the dirty work" ==> "famous brand gets off with a slapped wrist". But the third subtitle:
> Judges placed Dior and Armani units under judicial administration for one year.
So hopefully not, this time?