Does Fair Trade Really Matter?

Does Fair Trade Really Matter?

May 12, 2017


This weekend has another cause for celebration: this Saturday, May 12, is World Fair Trade Day! All of our women who embroider all EllieFunDay blankets, hats, bibs, and more, are paid a fair wage and are empowered by their work. In honor of this special day, we've gathered several common questions about fair trade and its positive impact on workers.



What exactly is fair trade?

Quality products that are environmentally, ethically, or socially conscious are considered fair trade certified. Fair trade organizations shed light to the injustices of regular trade by being transparent about the production process and employs workers who are fairly paid.



Is fair trade equivalent to outsourced jobs?

Not necessarily. Although fair trade organizations employ workers outside of the country, these workers have better trading conditions. There is a larger emphasis in the transparency of these trades between the organization and workers. Outsourced jobs often exploit workers by paying them less than minimum wages, while fair trade organizations exist to battle the cycle of poverty by providing workers better wages in less developed countries.



Why are fair trade items more expensive than non-fair trade goods?

Fair trade products aren’t always more expensive than non-fair trade products. Non-fair trade products often have many layers between the worker and the consumer, and the money that is paid to the worker is cut as the chain is longer. So even if the fair trade product costs equal to a non-fair trade product, the pay is more direct, and fair trade workers are paid more justly to ensure better living conditions.

At the same time we need to ask ourselves, are we getting too used to mass market prices where we forget to ask how much the worker is getting paid. Many companies are really transparent about their wages, i.e. Patagonia, Everlane, Krochet Kids & Sseko to name a few. 



What factors determine the wages of fair trade workers?

The wages of fair trade workers are dependent on many factors, including (but definitely not limited to) the living and minimum wages of the workers’ communities, the cost of training workers, and the intensity of the work. Also the cost of living in every country, state and town varies vastly. More often than not with the sewing units that we work with we start the discussion with them and ask if they think if what we are paying is fair. We also start roughly from this fair-wage calculator. The government in India has mandated laws stating how much every worker needs to be paid according to their region and skill-set. Whether this is reinforced or not, it's hard to say. 

To be entirely honest with you, we as a company are often struggling with the tension of paying a fair wage and making sure that we can bring a product that is market ready that will sustain us as a company. 



How much do fair trade workers really get paid?

Fair trade workers are paid enough to ensure enough income for a living, which means they are paid the minimum wage of their community, at the least. The amount that fair trade workers depends on the organization, but fair trader organizations are expected to be as transparent and non-exploitive towards their workers. 

We have built a relationship with our partner sewing unit where we go above and beyond just knowing what the ladies get paid. The non-profit that we work with also houses half of the workers on the campus which serves as a safe-place away from potential harm and past abusers. The children all attend school on a school bus that brings them daily to their respective places. Alongside of that, an onsite clinic gives them access to free medical services with a trained government doctor and nurse to address any health concerns. 

How can I support Fair Trade and be an educated consumer?

1. Educate Yourself : research the companies you love. Here are some helpful tools for you.

Project Just = scores and vetts different brands

EllieFunDay Gift Guides = our curated list of brands that promote ethical, local or fair-trade manufacturing 

Slavery Foot Print = a survey of how much slave labor is hidden in your daily consumption. 

Eco-Age = Eco-Age is a purpose-led ideas consultancy that powerfully aggregates global thought leaders and influencers to address the compelling issues and opportunities of our day by delivering solutions, through ethical and sustainable values.

 2. Calculate the cost of an actual product's cost of goods:

Common industry standard calculations: i.e.
$100. MSRP sweater divide that by 2.2 =
$45. wholesale divide again by 2.2 =
$20. Cost of Goods =  (Wage + Transport/Import Taxes+ Materials)

You can get a rough sense of what that person might have gotten paid to make this sweater. Which would be around 20-30% of the Cost of Goods = $6.

Everlane breaks it down here

These multipliers however fluctuate with other factors, including brand names, the type of goods itself alongside with the industry. Jewelry, glasses and shoes have higher mark-ups than other goods. 

3. Commit to buying one product fair-trade certified:

Start small, whether it is coffee, tea, or chocolate. Those are easy places to start. 

Look for these logos or direct trade language. This is a great guide to all of these logos. 

fair trade logos

We love to hear more about your questions and challenges with fair-trade! We are still learning in this journey and are always striving towards a better tomorrow. 





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