Paying a Premium for Morality

I was listening to this week’s podcast of The Boss Show yesterday, where Steve and Jim discussed, among other things, the way that American consumers will go to great lengths to save small amounts of money, and so retailers keep cutting costs by slicing into the “human factor”: worker salary, worker safety, worker sanity.

Steve and Jim were talking in particular about the last of those three, using an example of a company which is tracking worker movements using electronic armbands and docking them efficiency scores on individual tasks for time spent in the bathroom.  Later in the day, I read another article, talking about how the cost to safely sew a $22 pair of jeans in Bangladesh is ninety cents.  For $0.90, we can pay for safe factories and workers who aren’t killed trying to earn a living.  But time after time, businesses ask factory owners to choose to shave ten, twenty, thirty  cents — that’s less than two percent of the sale price of the jeans — by cutting pay, increasing hours, and failing to take precautions to protect their workers.

There are a lot of angles from which we can look at this problem, but the one I’m most interested in is this: would we, as American consumers, actually have a problem with paying $22.30, instead of $22, if it meant that young women in Bangladesh weren’t in danger of being crushed to death when their workplace collapses on their head?  I don’t think that the answer is no, but I also don’t think it’s as simple as a clean yes, either.

Why do Americans buy hybrid cars?  Part of the reason is price: as the cost of a gallon of gas goes up and the gap between hybrid and non-hybrid cars shrinks, the trade-off looks more valuable.  But the sales pitches aren’t based on cost, they’re based on the “feel-good” factor.  It feels good to buy a car that isn’t burning as much gasoline.  It feels good to buy eggs from cage-free chickens, so grocery stores prominently advertise them.  It feels good to go solar.  It feels good to plant a tree.  It doesn’t feel good to pay more for the same pair of jeans.

It there a way to bring these questions more into the public eye?  If the Shop-o-value can offer jeans for $23, and the Save-lots can offer them for $21, our choice seems obvious, but we don’t see that the Shop-o-value is using cage-free chickens, whereas Save-lots is burning fossil fuel just because it’s fun.  On the other hand, I don’t think a sticker that says, “Treats workers humanely; no factory collapses since 1986,” is going to have the desired effect.  It’s hard to quantify the cost in human compassion and fairness in a way that the American consumer can apply to purchasing decisions.

Maybe there’s a need for a non-profit organization which can rate factories and farms on a human rights scale, handing out A and B and F ratings to companies who care and don’t care about the conditions in which their workers produce for them.  Maybe we can move towards a world in which a WorkerCare grade of A would be a prominent selling point for an item, like pesticide-free or cage-free.

What do you think?  Is there a place for morality in business?  How do we achieve the transparency that consumers would need to take working conditions into account?

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