No, we don't currently have any sure way of knowing if the $26 shirt is more ethical or not. There are a few apps and a few reports (eg. produced by Oxfam) that can give us a broader idea of whether an item from a particular company is more or less likely to be ethical, but in the end we don't know for sure. And as responsible consumers, we should be demanding that retailers (especially large ones like Kmart and Target) provide us with the information or the assurances we need to be able to make an informed ethical choice.
As for the likelihood of a $2 shirt being produced ethically? Slim to none.