Can “doing the right thing” sell as well as “Just Do It”?
That’s the premise of a recent New York Times story, which describes the Knights Apparel company’s efforts to pay a living wage to unionized workers at a model factory in the Dominican Republic (hat tip to Jeff Ballinger). Knight’s Alta Gracia factory will pay factory workers $2.83 an hour to make college-label clothing for the U.S. market. This is enough to support a Dominican family of four, and nearly three and a half times the prevailing minimum wage paid by other factories making products bound for the U.S.
According to the story, “the factory is a risky proposition," for Knights, “even though it already has orders to make T-shirts and sweatshirts for bookstores at 400 American universities. The question is whether students, alumni and sports fans will be willing to pay $18 for the factory’s T-shirts—the same as premium brands like Nike and Adidas—to sustain the plant and its generous wages."
Downplayed in the story is the fact that the mark-up on such products is so high that, of the $18 price tag, the cost of production is only $4.80. Of that, a mere 80 cents per T-shirt is the cost of paying workers a living wage, rather than the minimum. For now, Knights will absorb the difference in the costs of production. But I would gladly pay 80 cents extra to know that my clothing was made by workers who can afford to support themselves and their families. I would pay even more if I knew that a living wage was being paid to an American worker. Wouldn’t you?