Clothing doesn't make the person, but it does make the painting!
I have learned so much from studying the early works of John Singleton Copley. He liberally embellished the clothing of his subjects and added "made up" props and backgrounds in order to get good compositions for his paintings.
A painting is so much more than a mere likeness and modern clothing can really frustrate me. For the most part, it tends to be rather dull and uninteresting.

I won't paint a kid in a tee shirt.
Color and shape are very important in a painting and I tend to use props and drapes as I struggle to "frame the face" and compose an image that will look good on canvas. I keep my eyes open on ebay and yard sales and have collected a large box of fabrics - shiny and dull - in my studio that I use in my portrait painting.
I'd like to know how others deal with yucky and uninteresting modern clothing...