By creating an account with our store, you will be able to get free voucher, move through the checkout process faster, store multiple shipping addresses, view and track your orders in your account and more.
Inequality has always been an influential factor in the growth and development of industries globally. However, after the Covid-19 pandemic, it seemed to worsen. This is due to the different speeds at which higher and lower-income countries recovered. Highly developed countries with top-notch healthcare systems survived the shock more than their weaker counterparts.
A more significant factor for inequality in the fashion industry is economic resilience. Even within the same country, the wealth gap of certain states or provinces differs. Some noteworthy examples are:
The United Kingdom North and South Regions
After the Covid-19 pandemic, the division between the North and South regions of the United Kingdom became worse. According to the Center for Cities, the pandemic has made it four times harder to close the gap between people's living standards in both regions. Therefore, fashion companies who want to expand operations might face more challenges in places like Hull and Birmingham.
Brazil’s Northeast and Southeast Regions
Similar to the United Kingdom, Brazil also faces an incredibly identical situation. There have always been wide economic gaps between Brazilian states. However, states in the Northeast have become poorer than those in the Southeast. Therefore, luxury brands now see more opportunities in the South and Central-West regions.
THE K-SHAPED ECONOMIC RECOVERY MODEL
Apart from states or provinces, the pandemic has also increased the global wealth gap between demographic groups in diverse countries. The increased inequality can be attributed to a K-shaped economic recovery model. This means the wealthiest people in all economies recovered quicker than those at the bottom of the economic chain.
For example, according to a 2020 report, poverty increase in the US was more dominant among blacks, people with high school education, and children. After the pandemic, over 97 million people were subjected to abject poverty and now live on an average of $1.90 daily. And many of these people have been shifted to the bottom of the global fashion chain. They have become exploited for the production of raw materials by factories that are prone to closure.
On the other hand, the number of wealthy people and their volume of wealth has increased tremendously. From March 2020 to 2021, 493 more Billionaires were listed on Forbes. Also, according to Business Insider, half of the world's wealth is distributed among 26 billionaires. Of these 26, nine of them are connected to the fashion industry. Therefore, it suffices to say that the number of people in the middle class is reducing. And this is because they are leaving the middle class to become very rich or poor.
HOW THE GLOBAL WEALTH GAP IS IMPACTING FASHION
Like other industries, the increase in the global wealth gap also affects the fashion industry. More people are moved to the top of the chain, exploiting those at the bottom. With these three case studies, we'll examine the effect of inequality on fashion.
Changes In Policies Will Impact Certain Segments
An excellent example of this is the luxury sector in China. China was one of the first countries to swing into action against Covid-19. Therefore, it experienced significant growth compared to others in 2020. However, China’s recovery has been unequal among demographics, with those at the bottom being the collateral damage.
Meanwhile, according to the Hurun Research Institute, the 2,398 people on China’s 2020 rich list increased their wealth more than they’ve ever done in 22 years. However, China's duty to continue to help its people grow their wealth might lead to a policy change. It will implement these policies to curb the wealth gap between different demographics. For this reason, luxury analysts fear there may be an expansion of taxes on the luxury market.
However, since the middle class is responsible for luxury spend in China. It's move to shrink extremes might benefit the luxury market in the long run. This will change the product development, marketing, and distribution of many luxury fashion items.
Intersectional Inequality Will Destabilize Fast-Growing Retail Markets
South Africa has one of the highest economic wealth gaps in the world. According to its statistics department, the country’s labor market is heavily racialized. While the whites earn the highest wages, the blacks are barely unemployed. This wealth gap has affected fashion retailers directly and indirectly.
International fashion retailers are displacing middle-class and lower-income retailers. And a series of riots by the suffering demographic party has led to a change in shopping habits. All these situations will combine to destabilize a fast-growing market like South Africa’s.
Unequal Retail Recovery Speeds after Covid-19
Take India, for instance. Although income inequality had been increasing for years, the state-by-state release of the lockdown skyrocketed it. States in the South and part of the North whose retail stores and malls were opened have recovered 98% of their retail sales. Meanwhile, those in the East with high Covid-19 cases are still struggling.
CONCLUSION
The impact of the global wealth gap on fashion keeps increasing. While some believe the right thing to do is to begin checking the excesses, others see it as a norm. No doubt, Covid-19 has played a significant role in widening these gaps. However, the goal is not to bounce back to pre-pandemic times but to regulate the differences between the top and bottom of the industry.
This website requires cookies to provide all of its features. For more information on what data is contained in the cookies, please see our Privacy Policy page. To accept cookies from this site, please click the Allow button below.