That doesn't explain why people in the poorest countries dress better than Americans. People living in the slums of India/Nigeria/Brazil are more likely to have a collared shirt and dress pants than an American going to work in an office.
I see two things happening here: (1) American spending less on clothing and (2) Americans having less self-pride in their attire and presentation.
I've spent a fair amount of time in Latin American countries, and a real sure-fire way to identify tourists is to look for people poorly-dressed or those who look like they just don't care about how they look.
E.g., despite much of Mexico being quite hot, you will almost never see a local Mexican wearing shorts, even on beaches. Tee-shirts maybe but almost always a freshly-washed button-up shirt. (Or a swimsuit if they're swimming obviously.) This is true of other Latin countries too in my travels. It's really humbling to see.
Then there are locals who wear heavy black-cotton pants and poly-blend long-sleeve button-up shirts while walking around the asphalt streets on hot-humid days. They make me want to pass out :)
I think most of ^^ are actually corporate dress-codes (plus perhaps lack of resources to buy non-work clothes) but I've not had reason to strike up a conversation about that.
I lived in central Africa for four years after growing up in New England. Adjusting to the climate was partly just a matter of time there, but also learning the unwritten rules. For example, if I met a friend on the street, we would not even think of starting to chat in direct sunlight, we would always look for some shade first. I also learned to walk much more slowly and really minimize the heat that my body was generating.
Vice versa, I have now lived in Vermont for twenty years and every year I am amazed how I start looking in my closet for a jacket the first evening that it hits 40 degrees, and yet the same temperature in February means my kids are wearing shorts and t-shirts to school that day and I am grilling steaks in flip-flops.
I don't follow the logic.
(You're not a bad person because you only wear cargo shorts! You just don't value your appearance as much as somebody who always wears suits.)
I'd love to learn of (and maybe live in) a culture that thinks elastic-waist sweatpants show a sense of pride rather than somebody who (for the moment) is choosing comfort over appearance.
Meanwhile I see some of the pics from r/streetwear, and those folks have pride! Sweatpants and all, I can appreciate that there is an actual aesthetic there and that their outfits fit their body types and daily needs (especially for techwear).
Nothing makes comfort or lack of traditional formality unstylish in itself, other than biases and cultural gatekeeping at least. Dirty clothes are lazy of course, but so long as your clothes actually fit you and are clean + coordinated, its possible to have pride in your style and be comfy. Even if suit afficianados sneer, if you like it and others like it, you can be proud.
It's not that I cannot afford to wear suits. Its that I dont like suits. Add in the marginal cost difference and I'd rather wear a tshirt. It's the market punishing the inefficiency of requiring your workers (or date) to dress in a certain manner when it adds no true value.
I think you prove my point (and it's not a bad thing!)
Sociology is interesting. A suit is traditionally a sign of "I invest in my clothes and therefore I have self-pride." (It's also a sign that you don't have to do hard/dirty labor.) It seems culturally America has decided that this is out-dated and are choosing to focus less on clothes as a sign of pride. This doesn't the pride isn't there, just that the ways of showing and seeing it have changed for some or most.
Some people will always think a tee-shirt or shorts look worse than a button-up and pants. It's a personal sentiment for sure.
I've avoided these kinds of careers because I want to be graded on my skill, not my ability to dress well. And suits are uncomfortable, and I like to be comfortable.
Over the decades, a suit has morphed from "I have power" to "I conform to the norm (and therefore I don't have power)" and with that change it is also apparent why people would want to not wear suits in an environment that traditionally required them.
Location may factor in here. They may look nice in NYC but they probably wish they could wear whatever they wanted (Zuckerberg) in Southern California.
Only lawyers and bankers dress fancy everyday here. And not even all bankers.
This is a non-sequitur: all of gp's points apply to people in the US. Cost of living, rate of change of income, fashion/dressing culture and price of clothes (absolute, and relative to income) are very different between countries - so I do not see the point of comparing at all.
"Dress better" is also subjective.
But in my travels the outfits are all of quality (highest that the person could afford or find) and they are all very clean.
I had an hour-long conversation with a Guatemalan woman about how she hand-washes her whole family's shirts and pants every day because they each only have two sets - one for today and one for tomorrow. She took great pride in how well-dressed and clean her family was despite them not having the resources for many clothes, a washing machine, or the luxury of not having to do hard, dirty work on a regular basis.