By: Danya Almoghrabi
The production of counterfeit fashion is a negative externality towards the economy. Counterfeit fashion is the production of fake brand names such as Nike,Louis Vuitton, Michael Kors, and many other brands. Consumers of these counterfeit products need to become more aware of how terrible this is to the economy.
Fake v. Real Celine bag
According to the “World Trademark Review”, the counterfeit market earns a revenue of more than $600 billion each year. That number means a lot of things towards, not just the economy, but also towards other people. These fake goods affect the real brand name companies whose total demand lessens because of how many people buy the cheap, fake products. For example, Louis Vuitton, one of the most counterfeited brands in the fashion industry, could be making billions of more total revenue if there wasn’t so much counterfeits being sold. These products are sold illegally on the streets, online, or in stores.
The impact that counterfeit products have on the economy is huge. The sales of real products reduce because people would rather buy cheaper items that looks similar to the real thing. This causes fewer output which leads to a decline in production. Additionally, it increases unemployment because if less products are being produced, less workers are needed. Also, concerning the global industry, it decreases trade because the products are not needed as much. Each country’s economy is affected because of counterfeit products. In the U.S. alone, we approximately $200 billion is lost annually because of counterfeits.
Counterfeit Bags Being Sold
Production of counterfeits don’t affect just the economy, but living dangers as well. For example, when a counterfeit is sold, the person selling the item usually sells it at a higher price than it is to make it so, they make a profit. With that money, they can do anything they want with it, like purchasing other illegal products. Although this is not always the case, counterfeit products create a domino effect that impact others as well as the economy. There are many other dangers that counterfeit products create, but, as described in the video below, there are also ways to stop them from happening.
In conclusion, people should be more informed on the dangers of counterfeit products towards the economy. Consumers may think that they are saving money buying fake products, but the opportunity costs are too high for this to continue. If you ever think of buying fake products, stop and think of how many other things you are affecting because of that small purchase.
Flows, Capital. "As Louis Vuitton Knows All Too Well, Counterfeiting Is A Costly Bargain." Forbes. Forbes Magazine, 25 June 2015. Web. 05 Feb. 2017.
"The Harmful Effects of Counterfeit Goods." Athens State University. N.p., n.d. Web. 05 Feb. 2017.
Lieber, Chavie. "Why the $600 Billion Counterfeit Industry Is Still Horrible for Fashion." Racked. N.p., 01 Dec. 2014. Web. 05 Feb. 2017.