New Internationalist

Equality watch: Fair work, fair trade

Issue 364

More and more people are resisting unfair trade and workplace inequality.

The exponential growth of the market in fair trade products in Europe is starting to be mirrored in North America and Australia.

In the Netherlands fair trade bananas from Ghana and Ecuador grabbed 10 per of the market within a month of being introduced. In Britain fair trade food sales have more than doubled since 2000 – making it the fastest retail growth area.

When millions drink cups of fairly traded coffee, tea and cocoa, the result is a living for producers in countries such as Kenya, Costa Rica and Mexico. By bypassing profiteering intermediaries, farmers can get a fair price for their product.

Many of these fair-trade producers are also co-operatives, applying principles of equality within their own organizations. In a world of globalization, excessive corporate power and ever-increasing salaries for those at the top, this is a small but significant victory.

The non-egalitarian model is getting an increasingly bad press these days. Even shareholders are beginning to echo trade unions in their complaints about ‘fat cat’ pay for bosses compared with low wages for workers. In the late 1980s in the US the ratio of an average CEO’s pay against that of a blue collar worker was 35:1. In Britain it was 25:1. Last year the US ratio hit 400-500:1, while the British ratio had doubled to 50:1.

Many co-ops operate an equal-pay structure. But democratizing the workplace is about more than just pay – it’s also about sharing power and decision-making. This is a big benefit for workers and for industrial relations, from which even the most conventional manufacturing company can benefit.

The International Co-operative Association lists co-ops in no fewer than 90 countries, across all continents. They range from sheep-rearing to broadband internet co-ops; from windpower to finance co-ops. Some consist of a handful of people, others are large groups like Spain’s Mondragon which includes more than 170 co-operative organizations and employs over 40,000 people.

For Majority World producers hit hard by unfair subsidies in the rich world, belonging to a fair trade co-op may be a matter of survival.

Take the example of cotton. The US Government currently pays its own cotton barons $3.4 billion in subsidies – a lot more than it gives in aid to the whole of Africa. These subsidies encourage the US cotton industry to overproduce. As supply increases, the world price drops – directly affecting African farmers. Cotton is Mali’s second most important export, and thousands depend upon it for their survival. But cotton farmers in the West African state are being crushed. Unlike the US, Mali is forbidden to support its cotton industry – conditions attached to its loans by the IMF and World Bank would prevent it from doing so.

The struggle for fair trade and fair work has to take place at many levels – not least at the international level. But fair trade co-ops are a practical and realistic part of that struggle for equity.

Sources: Julia Finch and David Gow, ‘Low Earners: Mining, catering and retail firms are at the bottom of the FTSE league’, The Guardian, 2 August 2003. John W Lawrence, ‘Democratic Worker Co-ops and the Struggle for Economic Democracy’, 2002, (http://www.geonewsletter.org)[www.geonewsletter.org] ; Dominic Nutt, ‘Cottoning on to Unfair Trade’, The Guardian 15 July 2003; Nancy Nachman-Hunt, ‘Will Fair Trade Become the Next Growth Wave’, Natural Foods Merchandiser, September 2003.

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