The Journey of Resold Goods

Georgetown University Professor Pietra Rivoli talks about her book, Travel of a T-Shirt in the Global Economy, and how the international business of second-hand clothing affects people's everyday lives.

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CHERYL CORLEY, host:

I'm Cheryl Corley, in for Michel Martin. This is TELL ME MORE from NPR News.

Just ahead, a popular department store makes an unfashionable statement. But first, most of us like to think that those slightly worn skirts or pants we donate will get in the hands of people who really need them free of charge.

Well, a chunk of that used clothing ends up being resold in developing countries. It's a billion-dollar industry, but one that isn't always welcomed.

Last week, Bolivian president Evo Morales restricted the import of used clothing, saying he wants to protect the local clothing industries, and he considers the business shameful. So this got us thinking.

So today, we take you on a journey, following the steps of your t-shirt. Where does it go when you drop it off? And our guide is Georgetown University professor Pietra Rivoli, author of the book "The Travels of a T-Shirt in the Global Economy."

Welcome, and thank you for joining us.

Professor PIETRA RIVOLI (Georgetown University McDonough School of Business; Author, "The Travels of a T-Shirt in the Global Economy"): Thank you Cheryl.

CORLEY: Well, Professor Rivoli, break it down for us. We've dropped the shirt of at the local charity, and where does it go?

Prof. RIVOLI: Well, if you drop it off, typically, it would be at a Goodwill or a Salvation Army, some place like that. And the mountains and mountains of clothing that Americans throw away simply can't be absorbed here in the United States. You know, even if we were to try to give all this clothing away here in America, there are simply not enough people who want it.

So normally what these charities will do is keep some of it and use it for their local operations, maybe in shelters and so forth. They'll keep some and sell in their thrift stores, but probably upwards of 90 percent of what you donate to a Salvation Army or a Goodwill, that charity will sell by the pound to used clothing companies.

The used clothing companies, then, will buy big truckloads from the charities. There's everything in there. It's unsorted. There's some nice things. There's a lot of junk. And what this company will do typically is sort through all these - grade it, make up bales of t-shirts, bales of jeans, bales of winter coats, and then sell them to importing companies, mainly in developing countries, but not always.

One of the interesting things is that, actually, the biggest dollar customer of American used clothing is Japan, you know, which is not a developing country, of course.

CORLEY: So it seems like this is a big financial benefit to lots of folks, both nationally and internationally.

Prof. RIVOLI: I wouldn't call it a big financial benefit to the businesses involved. You can talk to any of these businesses, and you will find that this is not a big moneymaking business - margins are very thin, competition is fierce.

But there are a number of beneficiaries in the trade. One are the local charities who sell the clothing, obtain the money that then go to support their programs here in the United States, so the Salvation Army will sell their clothing for five to seven cents a pound and use those resources to support their charitable activities here.

The businesses involved do benefit. It's a business that employs hundreds of thousands of people, both here and in the developing country. And, of course, the consumer's benefit because they get access to high quality, low-priced clothing.

CORLEY: So obviously, it then affects the global economy.

Prof. RIVOLI: Sure, sure. It's a very, very global industry. In many parts of Africa, used clothing is actually America's number one, two or three export.

CORLEY: Wow.

(Soundbite of laughter)

CORLEY: I'm going to have to brush off that t-shirt and that sweater and…

Prof. RIVOLI: Well, you know, if you look at the global economy, it's a very -it's full of circular flows. And what we've seen over the past decade in particular, is the price of new clothing falling because production costs are falling.

And that means you and I go out and buy more and more clothes, which means we throw away more and more clothes, which increases the swells of used clothing in the market and those, you know, make up part of these global trade flows. So the more you and I buy, the more we eventually will get rid of and will get sold.

CORLEY: And that's why the used clothing industry is booming now, then.

Prof. RIVOLI: That's why it's booming. That's why it's booming. I - you know, if you look at a clothes closet from a house built in the 1950s and you look at one today, you know, it's obvious that the middle classes in America are buying more and more and more clothing. And it has to go somewhere.

CORLEY: We're talking to Georgetown Professor Pietra Rivoli about the travel of a T-shirt and other used clothing, the business of secondhand clothes.

Now, in the case of Bolivian President Evo Morales, he took that issue to heart saying it was shameful to buy used clothing. And he's famous for wearing clothes native to Bolivia, even on his inauguration. So is there some kind of emotional aspect to this whole issue?

Prof. RIVOLI: You know, there's always an emotional aspect, I think to trade in general. So for example, many U.S. textile and apparel workers have lost their jobs over the past generation, and this is a phenomenon that's worldwide as the production of textiles and clothing shifts to Asia. We found that it is almost impossible to save a domestic textile and apparel industry by banning the import of used clothing.

If you think about, you know, what if in the United States we decided to ban the import of clothing from China? Well, there'll be a lot of poor families in this country that wouldn't be able to afford to clothe their children. And so I think that there are consumers in Bolivia, there are families in Bolivia that are looking for low-cost, decent clothing for their children. And this is something - this change in policy has taken away a choice for those consumers. And we have to think about, you know, whether the benefits from this new policy really compensate for the fact that, you know, you're not going to be able to, for example, buy clothes for your kids to go to school.

CORLEY: So let's say that a person is really concerned about their used clothing and that it be donated rather than resold. How can you make sure of that?

Prof. RIVOLI: You know, I think it's very difficult. And, you know, I'd even argue that maybe you don't want to make sure of that. If you talk to charities who are on the ground, both in poor countries and after natural disasters such as the Red Cross, they will say, please don't give us clothing. We don't have the means to sort it, to distribute it, to get it to the people who need it. Instead, please give us money so that the people can buy the things that they want and need.

If you go down to post-Katrina in New Orleans, I mean, you can find literally truckloads of clothing that are just rotting. The hard fact is it's businesses that know how to sort and distribute goods. It's not really the charities. They are there for other purposes, not to run a clothing store.

CORLEY: And I guess the moral of the story is, for those folks who are really concerned about donation and reselling is don't buy so many clothes.

Prof. RIVOLI: Well…

(Soundbite of laughter)

Prof. RIVOLI: I guess, if you're trying to cut down on the mountains of clothing that we all throw away, a good place to start is to not let so much into your house.

CORLEY: Pietra Rivoli is a professor of business at Georgetown University, and she joined us here in our studios in Washington.

Thanks so much for coming in.

Prof. RIVOLI: Thank you so much.

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