Saving our planet; one bag at a time

January 17, 2009

The real world beyond Fair Trade

This morning’s Indian Express carried an interesting article from the New York Times by Nicholas Kristof. The level of sensitivity Nicholas demonstrates is rare amongst Westerners. I guess living in the East has give him a perspective that would be difficult for people living in the West to acquire.

Even while appreciating the good intentions behind organisations such as Fair Trade, who certify (for a price) organisations who comply with their standards for workers’ compensation and treatment, he wonders whether Fair Trade is achieving more good or bad.

Fair Trade is committed to denying market access to sweatshops. But, he argues, if they were to sensitively look at the alternative employment options people in poorer countries are faced with, perhaps it would cause them to think a little beyond the obvious. Here’s what he says:

“My point is that bad as sweatshops are, the alternatives are worse. They are more dangerous, lower-paying and more degrading. And when I struggle to think how we can really make a big difference in the development of the poorest countries, the key always seems to be manufacturing. If Africa, for example, can only develop an apparel industry, it will boom.

Now, there are lots of reasons why Africa doesn’t have a garment industry (except for Lesotho, Namibia and a few other places), and they include corruption, poor infrastructure, and quality control. But it’s also true that if a major apparel maker went into, say, Liberia, it would be competitive only if it paid very low wages - and that would get the company in trouble with the press and sweatshop watchdogs. So there is zero apparel export from Liberia (a fragile country with huge unemployment and a wonderful president whom we should be trying to support).

One of the best aid programs for Africa is AGOA, which creates incentives for American imports from Africa, and it should be expanded. The European equivalent, EBA, is a farce and should be combined with AGOA. But to do all this, we need to rethink sweatshops. We need to build a constituency of humanitarians who view low-wage manufacturing as a solution. And that’s the point of my column.

Incidentally, I’m all for “fair-wage” clothing that is based on paying decent wages and providing decent working conditions. More power to those brands. But I think they reflect a modest niche, and the denunciations of sweatshops end up taking jobs away from the poorest countries”.

That is the real issue. One day, long ago, I was invited to a government business dialog on whether the minimum wage law should be applied to the garment industry in Gujarat (this was 20 years ago. The law does apply to this industry today). While I like to think of myself as a good human being who would like to see every human being prosper and lead a good life, I argued against it. Here’s why.

When the law applies employers tend to become more conservative about the number of people they employ because they have to remain sustainable. Without such a law in place they would employ more people and thus cause more people to get trained with sewing skills.

Sewing is one of those skills which can allow people to sustain themselves even if they don’t have a job (I know lots and lots of people who learned how to sew at one of the factories I have used who have their own machines and run a nice little bespoke sewing business of their own from their homes).

My contention was that if more people learned the skills it would do more good that just a few being able to earn higher wages. People like us, who are fortunate enough to have customers who pay higher prices for high quality standards have to pay higher wages anyway to attract the best people, and that is not going to change because of any laws.

So, I can easily relate to what Nicholas is saying. Of course it is easier for me to relate because I live in India and can daily see the vast number of people who have to find work for themselves without having any job whatsoever.

It’s an unfortunate fact that while we have trade unions and lots of laws that work towards improving workers’ lives but all those are restricted to people who have jobs. Any job.

But the larger part of our population seeks daily work for themselves without having a job of any kind. No one appears to be worrying about them. Not the well meaning folks at Fair Trade, nor the trade unions, nor, for that matter all our government bodies.

But Nicholas Kristof has recognised this and appears to be making an issue of it in the New York Times and on Facebook.

I hope he succeeds in making the point that instead or restricting employment further by limiting market access to registered people, powerful bodies like Fair Trade should recognise that creating more jobs in countries where unemployment is rampant would serve the interests of humankind far better than just improving the lives of those fortunate enough to have jobs.

We, at Norquest Brands, are confronted with a very real issue related to this which we’ve been figuring out how to deal with. Our marketing would be benefited by getting ourselves registered with Fair Trade. But, in doing so we would have to take away jobs from some people who we employ on humanitarian grounds. These are some old ladies who are being maltreated in their homes and so we allow them to come “work” at the factory and earn a small sum of money to raise their standing in their homes. As they don’t have any skills we cannot afford to pay them the minimum wage but they are grateful for getting some earning as that raises their standing in their homes and that matters immensely to them. We can do without them quite comfortably, but they need this and that matters to us.

So what do we do?

I asked a specialist consultant on Fair Trade. He said you’ll have to make up your mind whether this is more important or market access is more important to you.

So, thus far we’ve stayed away seeking registration, but the number of customers who ask for this is increasing and we’ll have to go that route sooner or later.

What will happen to these old ladies then?

Simple, said another consultant. Start 2 companies, one Fair Trade and the other not Fair Trade - and employ them in the other company. He told me of a very successful and well known company where their Fair Trade registered presence shows an employment of 300 people, while they actually have almost 5000 other people employed “otherwise”.

It is simple to execute such a plan but it doesn’t appeal to me because I’ve always believed in transparency and honesty. Being “clever” in that manner is aesthetically offensive to me.

Having said all this, let me clarify that while we are not Fair Trade registered, we ourselves, as human beings have provided factory conditions that are definitely not what one thinks of when they hear “sweatshop,” not because anyone told us to but because we are people who live by a code that we will not do anything that we can be ashamed of. So, to satisfy our own sense of right we’ve worked to make the factory a pleasant and enjoyable place to work. The assumption that all employers are exploitative unless some Western agency certifies them as decent human beings is insulting and offensive. There are millions of human beings like us who do a far better job being guided by their own sense of right and wrong without being told what to do. Both, the Western world and the Eastern world have a mix of some good and some bad folks.

I am racking my brains trying to find a good solution to this quandary. If you read this, please do share your point of view with me. I’d be grateful for all the perspective I can get on this.

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