I WORK IN COSTUMES AND CAN TALK ABOUT THIS MORE SPECIFICALLY
It's not just that we're unionized, though that absolutely plays into the financial aspect of it to a degree. There is 100% not just an anti-labor and anti-artistic sentiment, but also just an overall shift from these productions being treated as less like storytelling and performance, like they were in the past, and more like corporate investments and business endeavors. Everything is bottom line vs potential profits, marketability, and modern trends, or what will trend on tiktok, and you have to design to that constantly.
It's also that filmmaking has developed the expectation of making movies on such a short production time that there's no time to MAKE amazing beautiful pieces like this. A good gown may take weeks or months to complete and many rounds of fittings and mockups, and might be very heavy or restrictive to actors and limit how long they can shoot in a given costume. From my experience, things are decided on one day and have to be ready to shoot in a few weeks, and that's only if the writers aren't constantly having to make last second changes because the directors and producers change their visions constantly on a dime, down to the very last minute, and there's nothing we can do as the costume team except make it happen or make a REALLY good case for why we can't just find some cheap option fast that would work instead. So you might spend thousands on that beautiful dress only for them to completely cut the scene, change the context entirely in rewrites, or just decide they don't like the dress and want something else.
And because directors and producers get last say, and often they have Bad Taste and want things that are modern and marketable, and often will think things look great that are actually pretty unfitting for the character or make no sense for the design of the film, they insist on bad choices that then get pushed through to the end result of the film. Actors do this too sometimes, like what happened with Emma Watson and Belle's dress in the live action Beauty and the Beast remake, but usually only the big name actors have enough star power to swing full changes like that.
And of course, yes, there's not enough budget for high quality work. Costumers, like everyone else on film sets right now, are expected to stretch the budgets they're given to 'make it work' because so many have (in order to make the producers happy and keep their jobs). And in return, quality goes down, because in order to build a costume you need good fabric, embellishments, and labor. Good fabric costs a lot of money, embellishments cost a lot of money, hand fitting and skilled labor cost a lot of money, and costume budgets are being given none of that because the studios are incredibly strict and frugal with what they expect you to spend so they can make the most profit off of a given project, so cuts to quality end up being made somewhere in order to make up the difference and get the actors clothed.
I've rambled enough, but basically, yes, unions, but also there's a lot of deeper layers that go into why these things have been declining that are all interconnected and related to the general commodification of art and framing of art as content to consume rather than stories to tell that's happened in the past ten years or so.
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