Saturday, May 9, 2009

Fair Trade Wages: An Example

Lunch time in Owino, Lucy and Sarah
photo credit Stephanie Makosky

One of the ongoing challenges we face at One Mango Tree is equitable payment. There are no set guidelines for what constitutes a fair wage for handicrafts, as the products and geographical circumstances add a lot of different variables to the mix. So how do you decide what's "fair"?

We pay our tailors on a per-product basis and train the tailors on our entire product line. Lucy, our head tailor, receives the orders and delegates the work evenly amongst the tailors. This past September, we implemented a percentage-based payment system, where tailors were ranked based on their skills and gave a percentage of their earnings to Lucy, which provided a salary for her training. While this system looked good on paper, once we started seeing the effects on our tailor's pay, we were disappointed. It was very beneficial to Lucy, but kept the rest of the tailors at a much lower salary, and since promotion cut into Lucy's salary, there was a big disincentive to advance the tailors based on their skills.

This month, in unplanned conjunction with World Fair Trade Day, we changed our payment structure.

We decided to set a monthly salary for Lucy for the training and management work that she does with One Mango Tree. We then raised all of the tailors - both new and old - to the same level of payment. As long as someone completes a quality product, they get paid the same amount for their work. More skilled tailors naturally will earn more, because they can produce higher quality work at a faster pace. It's a natural promotion scale which creates built-in incentives for efficiency.

In addition, we commit 20% of the group's generated labor into a community savings account, which the women can then use at their own discretion. It's a great way to get the tailors to start thinking about their collective success, and to use those savings to invest in their business and build their local customer base.

Most people in northern Uganda earn $2 per day. That just about equates with $60/month salaries I've seen at many textile production facilities. Our tailors earn an average of $150/month, in addition to their bicycle and school fee stipends.

Want to learn more about setting fair trade wages? Check out these great sites:
World of Good's Fair Trade Wage Guide
Fair Trade Federation Principes: Pay Promptly and Fairly
Who's who in supporting producers

And for a quick crash course read on fair trade:
Fair Trade: A Beginner's Guide

I'm always happy to answer questions, so please do feel free to send an email to

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