Fashion historians and observers have always found a direct relation between fashion and the economy. They have gone on to make certain trends as economic indicators—the lipstick index, the rise and fall of hemlines, and most recently, the sale of men’s underwear if Warren Buffet is to be believed. Fashion has been a reaction or reflection of the times.
Fashion is an important part of not only arts but maybe even more industry. From the first glance only the aesthetic aspect of it is visible with the beauty, amazing creations and materials. But if one looks more carefully, the whole highly developed and profit producing industry lies behind this glitter.
The fashion industry is a product of the modern age. Prior to the mid-19th century, most clothing was custom made. It was handmade for individuals, either as home production or on order from dressmakers and tailors.
By the beginning of the 20th century—with the rise of new technologies such as the sewing machine, the rise of global capitalism and the development of the factory system of production, and the proliferation of retail outlets such as department stores—clothing had increasingly come to be mass-produced in standard sizes and sold at fixed prices.
Although the fashion industry developed first in Europe and America, today it is an international and highly globalized industry, with clothing often designed in one country, manufactured in another, and sold world-wide. For example, an American fashion company might source fabric in China and have the clothes manufactured in Vietnam, finished in Italy, and shipped to a warehouse in the United States for distribution to retail outlets internationally.
The fashion industry has long been one of the largest employers in the United States, and it remains so in the 21st century. However, employment declined considerably as production increasingly moved overseas, especially to China. By any measure, the industry accounts for a significant share of world economic output.
The fashion industry consists of four levels: the production of raw materials, principally fibres and textiles but also leather and fur; the production of fashion goods by designers, manufacturers, contractors, and others; retail sales; and various forms of advertising and promotion. These levels consist of many separate but interdependent sectors, all of which are devoted to the goal of satisfying consumer demand for apparel under conditions that enable participants in the industry to operate at a profit.
Fashionable clothes are many women’s and even men’s weakness. It is something imposed on people by media, however the good quality of garments from famous fashion companies also adds up to the sales.
The effects on the economy
In the midst of a global crisis, fashion tends to drop down a few notches in priority, but the garment industry is hardly something to ignore in times of trouble. According to the Garment Industry Development Corporation, New York’s fashion industry alone employs about 100,000 people with a sales volume of $14 billion.
This isn’t just an issue of being able to afford the newest Fendi clutch; the fashion industry is a massive operation affecting several overlapping economies and controlling thousands of jobs.
Financial analysts have loosely used it to determine where the economy is headed. So far it’s been pretty accurate. In the ’20s and ’60s, hemlines were at a high and so was the stock market. And in the ’30s and ’40s, the stock market was so low that women were almost tripping on their skirts. The hemline theory was also on the ball in 1987. Miniskirts were all the rage, and the stock market was at a matching high. But then the market quickly crashed in October, right when designers such as Bill Blass decided that miniskirts looked ridiculous. Hemlines dropped and so did the market.
There is no doubt in the importance of fashion as an industry branch. The amount of money it produces and the number of people it employs makes it a very significant area in the world of economics. On the other side economical situation and changes within it also leave trace on fashion industry. Being so closely entwined, any detailed analysis cannot be done without observing both.