Capitalism with a heart.

[A.Hidalgo]

Great article about an American clothing factory in the DR that get this, pays a living wage! Capitalists with a conscience. If only more would follow. Well we can dream and hope.

The factory is a high-minded experiment, a response to appeals from myriad university officials and student activists that the garment industry stop using poverty-wage sweatshops. It has 120 employees and is owned by Knights Apparel, a privately held company based in Spartanburg, S.C., that is the leading supplier of college-logo apparel to American universities, according to the Collegiate Licensing Company.

http://www.nytimes.com/2010/07/18/business/global/18shirt.html?pagewanted=1&_r=1&ref=business

 

[Hillbilly]

This is new and out of the blue

http://www.nytimes.com/2010/07/18/business/global/18shirt.html?th&emc=th

This is a NY Times story about a textile manufacturer that opened in Villa Altagracia and who is said to be committed to paying "a living wage"...not only that but the first photograph has the CEO embracing a UNION rep, something totally unacceptable in 99.9% of free zones in the country...

Where will this go? Will it be possible for Knight Textiles to be happy with the reduced profits resulting from the more than minimum wages paid to these workers? Will the unions keep quiet and enjoy this prosperity or will they suddenly go out on strike and force Knight ot pick up and move somewheres else, poorer but wiser?

This should be interesting...

HB

 

[cobraboy]

If consumers will pay the labor premium in a consumer-depressed economy with little blue sky, and the company and it's investors can live on lower margins-it might work.

That deck is stacked against them, however.

I wish them well.

 

[CFA123]

Competetive, no. They won't get high volume, but perhaps can maintain a niche market at the colleges. A basic printed tee for a high end label would deliver for $48/ dozen without a lot of embellishments. They're talking $58+/- for a no name tee. That's high.

 

[rice&beans]

Humanity, Giving back, No greed, sacrifice....

Great article about an American clothing factory in the DR that get this, pays a living wage! Capitalists with a conscience. If only more would follow. Well we can dream and hope.



http://www.nytimes.com/2010/07/18/business/global/18shirt.html?pagewanted=1&_r=1&ref=business

I know this is just an experiment, and they don't teach business students at Harvard this concept, that this would be the model for success. I hope it works out. PS..... Cobraboy....This is what I was talking about when we had that minor discussion about outsourcing. Humanity, giving back, No greed, sacrifice. Thinking outside of the box, I like it!! If more would follow this example, The world would be a better place. Hope it catches on!! THE ETERNAL OPTIMIST..............rice&beans

 

[rice&beans]

Humanity, Giving back, No greed, sacrifice....

If consumers will pay the labor premium in a consumer-depressed economy with little blue sky, and the company and it's investors can live on lower margins-it might work.

That deck is stacked against them, however.

I wish them well.

I know this is just an experiment and they don't teach business students at Harvard this concept (that this would be the model for success). I hope it works out. PS....Cobraboy.....This is what I was talking about when we had that minor discussion about outsourcing. Humanity, giving back, No greed, sacrifice. Thinking outside the box, I like it!! If more would follow this example, the world would be a better place. Hope it catches on!! THE ETERNAL OPTIMIST.............rice&beans

 

[cobraboy]

I know this is just an experiment and they don't teach business students at Harvard this concept (that this would be the model for success). I hope it works out. PS....Cobraboy.....This is what I was talking about when we had that minor discussion about outsourcing. Humanity, giving back, No greed, sacrifice. Thinking outside the box, I like it!! If more would follow this example, the world would be a better place. Hope it catches on!! THE ETERNAL OPTIMIST.............rice&beans

If you're willing to pay more for a generic product, be my guest.

Problem is that's not how world economics works.

 

[J D Sauser]

If you're willing to pay more for a generic product, be my guest.

Problem is that's not how world economics works.

Exactly! Either the "same" product will be just so much more expensive as the higher salaries affect it, or productivity will have to be higher/better and/or of better quality to justify a higher price.
The problem is, EVERYBODY EVERYWHERE would love higher wages. Certainly, in some places/situations higher wages could be possible by cutting excessive gains/abusive profiting, but in most cases in an open and transparent market (I am not theorizing that the DR is such a transparent market), wages are DIRECTLY liked productivity AND quality.

So far, I am inclined to trust that the apparently "gringo" investors/businessmen involved in the company mentioned, ARE conscious of this rationale... what remains to be seen though is, if the locals working there, WILL have the smarts to resist mistaking them for Gringos palomos/a cash cow which has to be be milked dry, and instead understand that it will be their work, output and quality which will keep those salaries up there.

... J-D.

 

[Hillbilly]

It seemed to me that they (Knight) has a niche market--the universities and their green societies--that could well make it work...Their products are in 400 universities and there seems to be a grassroots movement among the kids to do this.

The business plan is to keep whole sale prices close to the market. At $18 with the bask story, I am going to thing this could well work..

We'll see.,

HB

 

[Chirimoya]

Good on them. The Fair Trade experience in the UK and other parts of Europe has proved that there is a niche of consumers who will pay a premium for more ethically produced products.

 

[rice&beans]

It's gotta start somewhere.........

If you're willing to pay more for a generic product, be my guest.

Problem is that's not how world economics works.

Hey they thought the Panama Canal was a pipe dream, until THAT project was successful. NOBODY thought micro lending would work on the scale that it is now, (one NOBEL prize later) Thank you Muhammad Yunus. I know it is a true Capitalist's nightmare(and I'm not talking about you) just being general...... when they read a story that intentions are good, and it is heartwarming.....bla bla bla....they mumble ...RECIPE for disaster, and chuckle, I admire the guy, it takes big ones to try this in this economy.

 

[J D Sauser]

It's gotta start somewhere..........

History... or better, success stories, would seem to suggest that usually, it starts with a qualified work and quality minded WORK-force. See Japan, China, India, the quick re-birth of Germany after the wars etc.
The "other way around" -raising salaries to "adapt" them to those of the successful -like Spanish workers demanded, whilst unwilling and/or incapable to match the quality and productivity of the German (*) workforce- well, check out Spain now... or Greece... they all WANTED "it" like in Germany or France... except work like'em. :ermm:

All this would suggest, that it starts at schools, change of "culture" and the eradication of tigueraje at all levels (blue AND white collar tigueraje).

I am not saying that the mentioned business is doomed.
It will just stand or fall depending on how these workers remain productive or don't.

... J-D.

(*) Germany being mentioned because that's which country's salary standards other less productive countries' work"forces" aimed to see their salaries adapted to once they joined into the EU, yet obviously for "cultural" reasons, unwilling to give up 1 hour coffee breaks, siestas and "funny" schedules based on ancient agricultural routines.

 

[playacaribe2]

Interesting indeed...

http://www.nytimes.com/2010/07/18/business/global/18shirt.html?th&emc=th

This is a NY Times story about a textile manufacturer that opened in Villa Altagracia and who is said to be committed to paying "a living wage"...not only that but the first photograph has the CEO embracing a UNION rep, something totally unacceptable in 99.9% of free zones in the country...

Where will this go? Will it be possible for Knight Textiles to be happy with the reduced profits resulting from the more than minimum wages paid to these workers? Will the unions keep quiet and enjoy this prosperity or will they suddenly go out on strike and force Knight ot pick up and move somewheres else, poorer but wiser?

This should be interesting...

HB

but perhaps economically irresponsible.

And before people get those fingers frantically typing in opposition....consider that anytime a wage imbalance of this magnitude enters a market place, the historical downside repurcussions economically are far worse than the upside potential.

By way of example, assume that there are 3 factories with 500 workers each in close proximity paying fairly equal wages for the same skill set. Factory A triples its workers wages and Factory B & C do not or cannot.

The workers of Factory B & C hear of this wonderful news and immediately demand wage increases. If factory B & C are unable or unwilling to pay their workforce similar or equal wages, they will eventiually close or outsource to a different venue, leaving 1,000 people looking for jobs.

Consider also those "owners" of the country who have a stranglehold on transport. They will most assuredly begin to bargain for higher transport rates to gain what they believe is their rightful slice of the economic pie.

And the wage fallout will not be confined to apparel manufacturers. All the free zone companies employing minimum wage people will also feel the wage pressure and I know of few businesses today that are located in the free zones and that are labor intensive that can survive by tripling current salaries.

Afterall, cost is what brought/enticed them into locating there and many have contracts to supply product at a certain price point. Tripling, or even doubling wages would drive them under or out...neither of which is beneficial to the workers or the local economy.

Additionally, workers in factories outside the free trade zone may well now demand increases in salary. The potential for inflation rises rapidly as more and more workers demand those equal wages.

Differences in wages for equal skill sets of labor is a function of the marketplace, but a tripling of standard wages, while a wonderful Sunday NYTimes feel good story, may very well create more problems and misery than it solves.

I hope that this becomes a rare social experiment that works without the aforementioned consequences, but eventually the laws of economics, much like the laws of gravity, cannot be defied for very long.


Respectfully,
Playacaribe2

 

[cobraboy]

playacaribe2 understands the dynamics of the marketplace.

 

[rice&beans]

Dynamics.........

playacaribe2 understands the dynamics of the marketplace.

Indeed he does and so do you, IMBALANCE, DIFFERENT,DISRUPTIVE (radical approach) YES.........But it's nice to dream though,and it's nice to see. It's a good story, and refreshing, HOPE is good.

 

[cobraboy]

HOPE is good.

Reality is better.

 

[rice&beans]

Fiat money.....Que?

Reality is better.

Hahahaha.....I new you would say that, In a total literal sense reality IS better, (you know the but is coming) BUT always remember,whole countries and millions of dreams were built on HOPE......and by the way as I'm sure you know, the US dollar is backed by nothing............ but you guessed it HOPE............As in "I HOPE this dollar is worth a dollar when I try to buy something that costs a dollar".......so let's not underestimate the word HOPE. :glasses:

 

[mountainannie]

Thanks for posting this, HB! Made my day-- indeed this is a niche market - but certainly marketable- there is tremendous pressure to stop "sweatshp labor"

and I disagree that this is a "generic" product.. Barnes and Noble is not doing a specific ad campaign for a "generic" product.

 

[J D Sauser]

Hahahaha.....I new you would say that, In a total literal sense reality IS better, (you know the but is coming) BUT always remember,whole countries and millions of dreams were built on HOPE......and by the way as I'm sure you know, the US dollar is backed by nothing............ but you guessed it HOPE............As in "I HOPE this dollar is worth a dollar when I try to buy something that costs a dollar".......so let's not underestimate the word HOPE. :glasses:

hahaha?
Hope may have had a role in the building of countries... maybe it was rather desire and dedication, but lets leave it a hope for now... however really what it all boiled down to, in the case of the more successful ones, was BUILDING it. Americans, Germans, the French... what ever country... they were not just "hopeful". That would be them other guys... aranoid:

I DO wish that company, their investors and their employees and the community they are touching well, believe me it goes beyond me hoping. But it if any part involved is just hoping... good night! :bored:
It will take, schooling, training, counseling and a lot of patience and DEDICATION on ALL sides.


... J-D.

 

[dv8]

i really hope they fail. this is a lovely projects that surely makes the bosses feel all warm and fuzzy inside but economically and educationally it is a very bad idea. 500 dollars a month is a wages earned by dominicans with some decent education, languages and good computer skills. paying the same to a worker with no intellectual skills sends clear message: education is worthless. high wages should be an incentive for people who want to progress and move on beyond "meat, oat and milk".