Luxury fashion giants Dior and Armani are under scrutiny following allegations of exploiting migrant workers who earn as little as $2 an hour to produce high-priced handbags.
According to New York Post, these revelations came to light after Italian prosecutors conducted raids on several workshops and makeshift factories, discoering labor practices that allegedly failed legal standards.
Dior, chaired by Bernard Arnault, reportedly pays approximately $57 to manufacture a handbag sold for around $2,780. Similarly, Armani paid $270 for handbags that retailed for nearly $2,000.
The investigation also revealed that subcontractors hired by these luxury brands employed Chinese migrants and other foreign workers, often underpaid and working in substandard conditions, including long hours without adequate breaks.
Lawsuit Against Luxury Brands
In response to these findings, Italian authorities have taken action by ordering Dior, Armani, and Alviero Martini Spa subsidiaries into court administration. The companies are accused of relying on subcontractors and disregarding labor laws, health and safety regulations, and proper employment practices.
Central to the concerns raised is the exploitation of vulnerable workers within a system known as caporalato, which is characterized by illegal intermediation and labor exploitation. The accused subcontractors allegedly operated with minimal oversight, employing workers off the books and often in violation of immigration laws.
Brands that were mentioned could face severe legal and financial consequences, including hefty fines, mandatory compensation for affected workers, and possible criminal charges against involved executives. Regulatory bodies could impose stricter oversight and operational restrictions for others in the fashion sector.
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