What makes you think that Michael, or any of the other designers don't sew for people on the side? While maybe that's not going to get them noticed on a runway, it can certainly be a way to support themselves and their families.
Of course it can be done...but several - like Gretchen - have made reference to being so poor. When Mondo won the $20,000 he said that when he came to NY, he had $14 dollars in his bank account, so now he has $20,014.