Study: Shoppers will pay more for goods produced by fairly treated workers

Are consumers willing to pay more for goods produced by workers who are treated fairly on the job?

Very likely, yes, according to a study by Michael Hiscox, Michael Broukhim, Claire Litwin, and Andrea Woloski (link here to abstract and downloadable pdf) examining bidding patterns on eBay. Here’s part of the abstract of their article:

We provide new evidence on consumer behavior from experiments conducted on eBay. We find that labels with information about certified fair labor standards in factories making polo shirts had a substantial positive effect on bidding. On average, shoppers paid a 45% premium for ethically labeled versus unlabeled shirts.

Whoa! Could it be that shopping with a social conscience is not a practice limited to left-wing do-gooders!?

Competing values

My mom was a child of the Great Depression. She clipped coupons, waited for sales, and spent judiciously. She embodied the idea of thrift as a virtue.

Today, however, we know that thrift may conflict with socially responsible consumerism. Many inexpensive goods are produced on the backs of poorly paid workers.

Especially in today’s difficult economy, it’s not my place to criticize someone who is struggling to make ends meet for shopping at stores like Wal-Mart in search of the lowest possible prices.

However, it is sadly ironic that the manufacturing, production, and marketing practices of many big retailers are fueling a “race to the bottom” mentality when it comes to wages and working conditions. In other words, the downward wage push created by these chains is contributing to an economy where many folks can’t afford to shop anywhere else.

The Hiscox, et al., study suggests that maybe we’re ready to blend thrifty consumer spending and social responsibility to fellow workers. A rising tide that lifts all boats beats a race to the bottom anytime.


Hat tip to Rick Bales at Workplace Prof Blog for his post on this study.

One response

  1. I am not buying anything made in China, and have found that it’s difficult to find a wallet, drinking straws, pocketbook, dishes (both melamine and china), or just about anything else that is not made in China. It is not just the low priced items. Since I decided to not buy Chinese until labor and environmental safety conditions change for the better there, I am much more aware of how much of our consumer goods are made in China.

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