Cost versus benefit

So I’ve been keeping an eye on my disposable income for just under a week now. I definitely haven’t noticed a huge shift in my spending habits – at the moment I seem to be simply accepting the extra money has to be given away. There are a couple of reasons for that – firstly, I spend a lot of time during the week at work, so I don’t have much of an opportunity to spend lots of money, but secondly, I wasn’t giving away much in the first place when I felt I ought to have been – so in a way I am simply doing what I had always hoped I would do.

I have noticed that I have become more mindful of my finances. I think about how much food costs, then I think about how much time somebody spent creating what I had eaten, how much they had been paid and so on.

I’ve been an advocate of fair trade for a while now. I try and keep my clothes fairly traded, and I’m always looking for new ways to spend my money in a just way where I perhaps have not been doing so previously. Certified ‘Fair Trade’ goods guarantee not only a fair price but also a premium that goes towards developing the economy in less economically successful countries – an aim not too dissimilar to my own experiment.

I’ve recently become more and more aware of how as a culture we expect products and services to be ‘cheap’ and it rarely enters my mind that prices should also be ‘fair’ (though often ‘cheap’ and ‘fair’ cannot be easily matched up). Does it really stand to reason that fair trade is too expensive?

A simple case study: You buy a pair of Jeans from ASDA at £2.50. At least 20% of that is going to be profit for ASDA – 50p. Delivery and storage is going to cost ASDA around 20p of that. This leaves us with a total of £1.80 or $2.50 per pair for the supplier.

The supplier uses a minimum of 1.2m of fabric at a cost of about $1.70, so the factory has about $0.80 left to pay overheads and then its workers. I’d vouch that around $0.50 at most of each pair of jeans actually transfers to a worker.

Jeans are not made in fully automated factories, which means that they take time to make. Especially where there is cheap labour that is more cost-effective than using machines. How long would it take you to make a pair of jeans? An hour or two? an hour if you were good? half an hour if you were experienced? Maybe 20 minutes if you were really good?

Say you could make a pair of jeans in 20 minutes – from start to finish – you would earn $0.50 in 20 minutes. That’s $1.50 an hour.

$1.50 an hour.

Yes, the living wage in those providing countries is lower, but it still doesn’t tend to match up. And in any case, the gulf in wealth seems crazy to me.

So I can buy cheap – and I am lucky that we have the option to buy cheap – but why would we, when it means such a raw deal for the producers and their employees? I could buy more expensive brands, but often the reality is that their mark-up is greater.

Only one option then, really…

 

 

 

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