Fair labour by free-market means

Posted: January 7, 2011 in Consumer campaigns
Tags: , , , ,

The title of this post may sound paradoxical, but the facts are encouraging.

Think of how the Fairtrade label has become mainstream for coffee. Small-scale committed activism won the day against the multinationals who eventually decided that they couldn’t afford to forfeit the ‘ethical purchase’ to their competitors.

The good news is, consumers are prepared to pay more for ethical goods. Research found a 10-20% increase in demand for products with a label stating that they are

made under fair labor conditions, in a safe and healthy working environment which is free of discrimination, and where management has committed to respecting the rights and dignity of workers

The bad news, however, is that the 10-20% premium may not be enough to recoup the cost of implementing and effectively monitoring a fair labour sourcing policy in a typical company (We can perhaps infer that committed, sustained activism pushed the premium rather higher in the coffee industry).

A concerned consumer really ought to take the time to locate businesses that treat the issue of fair labour seriously. This could be done in two ways: either supporting a cottage producer who prides itself on its ethical sourcing, or, if it is a choice between two mainstream companies, researching which has the better practices. Luckily it needn’t be as hard as it sounds.

The first type of company exists if you look for it, companies such as Alta Gracia Apparel, which produces college-branded clothing in Villa Altagracia in the Dominican Republic. Alta Gracia pays its workers a ‘living wage’; which is three and a half times the local minimum wage (see NY Times story about this initiative). The only way to meet this cost is to make their products more expensive; so ethical consumers really need to make the effort to vote with their wallet.

In the U.S. there is a fast-growing network of such companies called B Corporations (the ‘B’ stands for ‘Better’). At time of writing they have over 300 suppliers listed on their website.

The second approach, i.e. weighing pros and cons of well-known companies, is not as hard as it might be. The Guide to Ethical Supermarket Shopping profiles dozens of companies and is available in pocked-sized print form or, even more conveniently, as an iPhone app. Its evaluations are based not just on labour rights but also environmental and other standards. The guide is published in Australia but most of the profiled companies are multinationals with a presence worldwide.

  1. […] Fair labour by free-market means 7 January 2011 […]

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