Archive for the 'Living wages' Category

Jan 26 2012

Fair versus Free Trade as means to promote Economic Development

Fair trade schemes aim to get more of the money we spend on our stuff into the hands of the workers in less developed countries where they originate. Some examples of goods produces in fair trade cooperatives in poor countries include fruits, tea, coffee and cocoa. Some handicrafts and textiles are also available from Fair trade programs as well.

It is estimated that approximately 7.5 million producers in the developing world participate in fair trade programs, producing $5 billion worth of output.

According to the European Fair Trade Association, fair trade is

a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South.

Fair Trade organisations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade”.

Fair trade as a strategy for economic development is controversial, as many argue that either fails at raising the incomes of the farmers it is supposed to serave or that it incentivizes farmers to remain in the low-productivity agricultural sector rather than seeking higher productivity jobs in manufacturing, thereby contributing to poverty in poor countries.

Below are two videos that proclaim the benefits of free trade. After watching the videos, discuss the benefits of fair trade with your class.

On the other side of the issue are several economic arguments against the use of fair trade as a strategy for economic development. First listen to this 19 minute discussion between EconTalk’s Russ Robert’s and Duke University’s Mike Munger over the role that Fair Trade coffee plays in promoting economic development.

Next, read the two articles below a

Discussion Questions:

  1. Discuss the strengths and weaknesses of Fair Trade programs at promoting economic development.
  2. Outline the possible advantages of a country specializing in manufactured goods instead of primary products.
  3. What factors explain the growth in importance of multinational corporations over recent decades? Illustrate your answer where possible by making reference to your own or other countries. Do multinational corporations work in favor of or against the interests of Less Developed Countries?
  4. To what extent has the international trading system contributed to economic growth and development in less developed countries?
  5. Discuss the view that increased trade is more important than increased aid for less developed economies.

2 responses so far

Jun 06 2007

China makes, the world takes

Made in China – The Atlantic MonthlyShenzhen

Here’s a great slide show and narrative about the manufacturing industry in the industrial city of Shenzen. After viewing the slideshow, discuss some of the questions below.

Discussion Questions:

  1. What does the narrator mean when he says “Shenzhen is more or less an invented city?”
  2. Why does the word “scale” come to the narrator’s mind as he explores Shenzhen? What key concept from our economics class includes the world “scale”? HowShenzhen does the growth of Shenzhen relate to this concept?
  3. What is exported from Shenzhen to the US? What is being sent back to Shenzhen from the US? What does this suggest about the Chinese/US balance of trade? Why do you think this is happening?
  4. Where do Shenzhen’s factory workers come from? Why do you think young women make up such a large percentage of factories’ workforces? Are the wages paid factory workers in Shenzhen “fair” wages? Why or why not?
  5. Is manufacturing in Shenzhen labor intensive or capital intensive? What’s the difference?
  6. What’s the significance of the last line about how Liam Casey, whose office overlooks the headquarters of the Shenzen communist party, has never “met anybody who was in there”. What does this say about communism in China today?

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4 responses so far

Apr 25 2007

America’s Immigration Problem – the human cost

Immigration: The Human Cost | The Onion – America’s Finest News Source

Free trade, labor mobility, globalization: scary words! Watch this harrowing story of the insufferable losses imposed on American workers due to immigration, then post your comments. What impact does immigration have on American jobs? Should the US take greater steps to protect Americans like Mr. Boyle from the threat of cheap labor from poor countries? Who is truly harmed by labor mobility and who benefits?

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