Don't Buy From the Poor!

I recall reading an article, some months ago, in the Wall Street Journal weekend edition, which profiled the effect that working in an affluent department store was having on the lives of three young men from poor backgrounds. India, with its booming tech economy sitting alongside desperate poverty of the sort seldom seen anywhere in the US, makes the inequalities of the US look like nearly nothing. The three young men in the article had landed jobs as retail clerks where they sold India's upper crust designer jeans and other expensive clothing. In many ways, this was the transition point for them and their families into a better world -- making two to three times what their fathers had made running small sales stalls or doing manual labor. They got used to speaking English much of the time instead of Hindi or their local dialects, and began to spend much of their spare time with other employees. One of the young men saved up his wages to buy a computer for his family -- selecting a model with a TV input jack in the back so that his mother and grandmother could watch TV during the day while he was working. He was proud of the computer, but it had to sit on the floor because there was no room for furniture in the 400sq/ft single room apartment where he lived with three generations of his family.

It was an interesting and very hopeful article, about hard work and people beginning to emerge from poverty into the "developed world". However, it struck me later that the same facts could have been turned into a very, very different article.

A little while ago I heard a very earnest and idealistic young woman bemoan that as she had looked through her closet she had realized that her clothes had all been made in places like Ecuador, Guatamala, Indonesia and China. She felt deeply guilty that she was supporting companies that paid people poverty-level wages in the third world, and wondered aloud where she could find clothes that were made by people paid a decent living wage.

I sympathize with the desire to make sure that one is not supporting companies who actively exploit their workers, but if that desire results in a decision to refuse to buy anything made in developing nations, how are those countries supposed to improve their lot?

Thinking about this, I realized that another author could have written a very different article about those three clerks in India: A tyrannical deparment store chain serves a rich clientelle while its employees live in crowded one room apartments. Young men from poor families are forced to smile and sell designer jeans they could never afford on their meagre paychecks. Even when one of these men saved up for a computer for his family, he had to put it on the floor because they all lived in such poverty. Boycott the store now!

How much is a fair wage? The young men in the story were thrilled to me making 2-3x what their families and peers had made in the past. They imagined they were on their way up. Yet others, I'm sure, would label them as suffering a great injustice by not making more.

One of the primary ways of competing for business is by offering a product of similar quality at a lower price. Say that Country A currently has an average textile manufacturing wage of $10/hr. Country B is across a major ocean from A and is much less developed, with an average wage of just $2/hr and many former agricultural laborers flocking into the cities looking for work. If a company sets up a shirt factory in Country B which pays $4/hr in order to get the best workers and still be able to sell shirts for less (after frieght) than the shirts made in Country B, are they taking advantage of their workers?

Perhaps a highly localist response would be: Country B's poverty is its own problem. They need to develop to the point where their workers also make an average of $10/hr before they are allowed to trade on a level playing field with Country A.

Others, who are not as localist but are very much concerned with a just wage, might say that the employer in Country B was exploiting its workers by paying less than half as much as workers in Country A make, and thus one should refuse to buy anything made in Country B.

But really, doesn't that amount to saying that it's not right to buy from the poor until they're not poor anymore? How are the workers in Country B supposed to work up to making enough to be judged a "fair wage" by observers in Country A?

This is not to say that there is not such thing as a "fair wage" or a "just wage", but it does seem to me that these things are almost certainly relative to general wages in an area and to the value of the result of the labor.

While it is right for people to be concerned about how the workers who produce the products we buy are treated, it may often be that the best way to help those living in poor developing nations rise out of poverty is to buy the products that they make.