As you may have seen on the Purnaa Blog, we recently became Guaranteed Fair Trade under World Fair Trade Organization (WFTO). If you want to learn more about Fair Trade, check out the blog post in the link above.
One of the principals of Fair Trade is “Fair Payment.” This fall, WFTO plans on releasing a Fair Payment policy stating that all Fair Trade organizations should be (or should be working hard towards) paying workers a living wage.
What is Living Wage?
The definition of living wage can vary a bit if you do a google search, but the essence means that a worker can pay for the necessities of life (shelter, food, medical, education for children, etc) and have about 10% left over for savings for the future. It is calculated by country but can be calculated for a specific region if the income inequality is high from region to region. There are good living wage calculators available to use if you are interested.
When looking at living wage at Purnaa, we used WFTO’s Daws Living Wage Calculator, an internal study of our employees actual expenses, and a report from the government of Nepal on living wage for the country. Each of these calculators yielded similar results; living wage in Nepal is about nrs 16,000 ($160) / month for each employee. This is much more than the official minimum wage of $100/month.
Paying Living Wage
I believe that a working person should be able to afford a basic standard of living. It is unjust to take a persons effort and labor, and in return give them a compensation that is below what is decent. We believe this so much that starting next week Purnaa will be making the living wage the minimum amount of compensation that we offer.
There are, of course, real challenges that need to be addressed to make this possible. We work in an industry that is notorious for exploiting people; sewing work does not pay a high salary. On top of that, we offer employment to people that society would consider not financially viable. We take broken, hurting people and pay them far above market rate, and in a country that ranks near the bottom in ease of doing business! We cannot simply pay a higher salary to our employees and hope to survive as a business. And so, we are looking to address these challenges in three ways:
- Finding good partners and customers. At the end of the day, we need customers and partners who are willing to pay a higher amount for their products. We cannot compete on price with unethical businesses who exploit their people, and our prices will probably always be higher. We need customers that are willing to pay more for something better in the world.
- Increasing Efficiency. While it is good to ask customers to pay more for better treatment of workers, it is not good to ask them to cover inefficiencies within an organizations operations. We are working to develop new methods of production and using the best tools we can find to enable us to do much more work with less effort.
- Training well. We are working very yard to train our staff so that they are the most skilled sewers in town . If we are paying our employees 1.5 times the going market rate, we need to be enabling them to be producing 1.5 times the amount of goods as well.
By accomplishing these three things we are working to make life better for everyone involved in the industry. Customers that work with us are no longer participating in a system that exploits people, while employees that come to Purnaa gain significant skills are able to live a fulfilled life through their own dignified work.