It has been three years since the beginning of the COVID-19 pandemic and the state of the economy still feels like a roller coaster. According to economists, recent hikes in interest rates by the Reserve Bank of Australia and the current cost-of-living crisis in the country have resulted in consumers splurging less on unnecessary purchases like fashion. Fashion designers say there is a calling for more modest and basic clothes, as accessories fade from our grasp. It has become more difficult to afford the things we want and need, forcing the globe to live and dress frugally.

However, the relationship between the economy and fashion is not a new phenomenon. Fashion is cyclical and styles come and go according to the state of the world at the time and consumers’ and manufacturers’ access to materials and production equipment.

Fashionable history

In 1926, economist George Taylor coined the term the ‘Hemline Index,’ when he noticed how women’s dresses were longer in times of economic collapse, and shorter when the economy was at its strongest. He said the reason behind this was due to women’s access to silk stockings. During an economic boom, more women could afford the luxury product and would show them off by wearing shorter skirts as a status symbol.

According to History.com, the 1920s were notorious for their iconic flapper girls – young women who embraced lifestyles expressing sexual freedom as women’s independence rose following the first World War. Their recognisable short skirts were controversial at the time but represented women breaking free from traditional views as they entered the workforce and, thanks to the years of lobbying and protest by the women of the suffragette movement, they were given the right to vote. The younger generation of girls kicked off an era with the natural, fun, and flirty silhouette much to the despair of the older women who feared that their party girl antics would undermine the women’s equality movement.

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The 1920s were also a time for innovation and convenience. The decade saw the introduction of instalment plans, enabling average Americans to pay for expensive items over a period of time. This new model gave rise to the consumer economy and a thriving system at that, but the accumulative debt and credit growth led to an ultimate crash. Companies couldn’t afford to keep up with the overproduction, and banks went out of business, leaving millions of workers in America and Europe out of work. This was one of many events to blame for the Great Depression from 1929 to 1939, which forced people to cut down on costs. The financial hardship that came with unemployment made longer skirts trendy as luxury goods grew out of reach again. This cycle can be seen throughout history until today.

Data from the a 2018 Parliamentary briefing shows Australia has not had a recession since 1991 due to strong economic growth in population and export, apparently the longest amount of time for a developed country since WWII. But there were fears this wouldn’t last long.

The Great Depression 2.0

Fast-forward to 2020, consumers, manufacturers, and business owners were facing a new battle. According to the Australian Bureau of Statistics, by March, COVID-19 had crept its way into Australian homes as state governments began restricting the public’s access to dining out, recreational services, and personal services. While essential places like hospitals and grocery stores remained open, many workers faced unemployment, and these struggles reduced consumer spending.

Econometrics lecturer at University of Tasmania, Dr Paul Blacklow says many things affect a consumer’s desire to buy something, such as necessity, preferences, and the effects of advertising. He says advertising appeals to consumers but the effectiveness of it depends on income.

“When the economy is strong, there are more people with jobs, wages are higher, people have more income and are, therefore, more able to buy things, and are more susceptible to advertising because of spare money.”

Dr Paul Blacklow

Blacklow notes that the inability to go into physical stores during COVID-19 lockdowns in Australia greatly affected consumer spending. He says when the economy was struggling, consumer confidence went down as Australians no longer felt sure they would be able to keep their jobs and have enough income to live, so fashion was one of the first cuts made.

He says online shopping grew in popularity during the pandemic and has continued to influence buying habits coming out of it. He says people had positive experiences spending money online and got used to how effective it was, which made them want to continue shopping for certain items online.

However, in a post-covid era, many things are becoming harder to afford as the economy recovers from the lasting effects of the pandemic and other global issues. Blacklow says the excessive spending of consumers once everything started opening again was a big contributor to recent inflation.

The Reserve Bank of Australia has increased interest rates 11 times over the past year, in June it was raised to 4.10 per cent, its highest since April 2012.

Blacklow says China’s tension with Taiwan and the war in Ukraine created supply shocks, and these interruptions in trade made the price of food and oil increase in 2022, which are now affecting Australia and creating inflation.

“Consumers are starting to get worried again… now the Reserve Bank has been increasing interest rates quite a bit and mortgage interest rates are very high, there are now talks of a recession coming in the next 6 to 12 months.”

Dr Paul Blacklow

The growing economic concerns around the globe are once again affecting the fashion cycle. As lower-middle-income consumers no longer have extra money to spend on fast-changing micro-trends, we are seeing people revert to minimalist styles, and designers are appealing to this aesthetic.

Looking for new material

Malaysian-Chinese fashion design student, Philomen Kho describes his style as eclectic. He is inspired by classic trends of the past when creating his designs. He says he mostly designs for women as their silhouettes can be much more flexible. He says fashion seems to come back around every 20 years, so he wants to design clothes that are reminiscent of previous trends but updated in a modern way to reflect current times

“The COVID era made designers like me more conscious of what I’m able to buy and what consumers are able to buy,”

Philomen Kho

The relatable experience of staying at home during COVID-19 came with a new boost for a particular type of clothing. According to Google Trends data, the term ‘loungewear’ reached peak search volume in Australia in April 2020. Kho says consumers could no longer find a use for their tight jeans and dressy tops, replacing them with leggings and over-sized hoodies at home.

The 29-year-old budding designer says he noticed how consumers’ habits changed during COVID-19. He says shoppers were purchasing more lounge-wear since being stuck at home, and the isolation of the pandemic saw a rise in self-care products as well as sweatpants. Google Trends data showed that the term ‘self-care’ was reasonably searched before the pandemic, but it reached its highest search volume between March 29 and April 4, 2020.

“Brands that maybe only sold clothes were also selling products like candles because there was a lot of promotion for self-care and the idea of ‘treat yourself at home, you’re stuck at home, so you might as well make it an environment that is very lovely to work in,’” he says.

“I think that affected the market because people wanted to be comfortable at home and that translated to the clothes they wore as well.”

While it was a tough time for many people around the globe, Kho says the time spent at home also encouraged isolators like himself to be more creative and expressive with their fashion style. DIY videos by regular people on platforms like TikTok painting on their jeans and re-purposing old tops encouraged fashionable individuals to try new styles and accessorise in different ways. This prompted fashion lovers to dress up even when doing the most mundane tasks at home.

In April 2020, Australians kicked off a global trend of dressing up in their fanciest or silliest clothes to take their bins out, posting their outfits on social media platforms to poke fun at their inability to get out of the house.

The trend started on Facebook with a group called Bin Isolation Outing, which invited people to get dolled up and take a photo of themselves wearing a humorously inappropriate outfit in their driveway. This movement made fashion seem accessible again, and like many things, it sparked a change in Australians as fashion lovers continued to play with their styles as the pandemic died down.

Trends are known to take off quite fast and die down even quicker, therefore Kho says designers must be able to keep their consumers interested in purchasing their products while also remaining authentic to their personal brand and considering environmental factors that may affect access to materials. He says trends can start from anywhere from a popular television show character to the state of the economy, but influencers and celebrities also play a huge role in developing styles.

Setting the trends

Journalist Julie Miller wrote in a Vanity Fair article, that celebrities on the red carpet have been at the forefront for showing off fashion since the first-ever Hollywood premiere of Robin Hood in 1922. Many notable looks since then include Audrey Hepburn’s elegant 1954 Oscar’s dress, Britney Spears’ and Justin Timberlake’s matching denim ensemble for the 2001 AMAs, and Kim Kardashian dripping from head to toe at the 2019 Met Gala. Historically, red carpets were viewed as a platform for audiences to see their favourite actors outside of the screen, but the prestige that came with these events meant celebrities came to be viewed as glamorous fashion icons.

Content creator and photographer, Liz Yong has been pursuing photography since 2018, and social media since 2021, and her recent job for a fashion company makes her hopeful for her future in fashion. Yong says she has managed to develop a taste for fashion based on the media she consumed in the past and sees on social media.

“Beyonce, when I was younger, was definitely a huge artistic inspiration. I think it was just her position in pop culture, and also, Doja Cat is the more recent example when I think of personal branding, and I think it’s very interesting to look at how her career has mapped out so far with her visuals and styles as an artist,” she says.

The 21-year-old creative believes that her work doesn’t aim to say anything, but she likes her photography to be romantic, timeless, and to idolise beauty. She says customised clothes were a trend she caught onto coming out of the pandemic as she finally had an avenue to display her projects, but as cost-of-living increases, she can no longer afford the supplies she wants and is seeing her work shift away from flashiness.  

‘Recession-core’ is a term coined by communities online to refer to the rise in minimalist styles and muted tones because of the recent economic crisis. Research by M&C Saatchi Sport & Entertainment shows online conversations around frugality rose by 486 per cent as of April this year. Yong says a big indicator of this phenomenon is the absence of necklaces on celebrities on the red carpet. She says this has been the result of middle-income and lower-income audiences around the globe finding huge displays of wealth displeasing when the economy is struggling.

“Influencers, who are the main people who embody fashion trends, [care less] about cost of living because it doesn’t affect them, because they are usually upper-middle-class or higher.”

Liz Yong

Yong says fashion trends are prevalent online, but people are consuming fashion differently now. She recognises more people today find inspiration through content creators but still seem to stick to a style they are comfortable with, finding ways to reuse what they already own, even if their tastes and financial situations change.