Not to mention that $9.00 USD wouldn't cover the cost of even "budget" yarn for most home handmade knit/crochet garments.
Agreed, there can be little doubt that cottage industry/sweatshop labor is involved to meet the demand of high-volume retail. That reality is, in and of itself, dehumanizing, unethical, and downright unconscionable.
@fugitive247 Good point. This was being sold by HM though, so rather than underselling someone working at home trying to help feed their family, it's probably more like exploited labor in an underdeveloped country.