MODULE 53: Fair Trade Programs
Core Module Issues:
• Are fair trade programs important?
• What, if any premium, are consumers willing to pay for fair trade
products?
Module Teaching Notes
This module is a compliment to the last one (Module 52).
If corporations will not act to improve the lives of workers who produce for American markets, will
consumers step in and do something?
For some time now, one has been able to find “fair trade” coffee at most grocery stores. Bags of coffee
beans marked with a fair trade label promise that the growers of the beans have been paid a “living wage”,
or an otherwise defined reasonable rate of compensation.
Fair trade coffee seems to cost a bit more – maybe 50 cents to 1 dollar more per pound – but many
consumers seem willing to pay the premium.
There are more kinds of fair trade products available as well. It may be that in the future, most items come
with at least a fair trade option.
If that happens, the key question is: will consumers pay more on a regular basis? Will they believe that the
extra cost will actually go to support poorly paid workers outside the US? And will consumers feel obligated
to spend their hard earned dollars on such a cause?
The scenario in this module envisions a massive and well-trusted fair trade certification organization that
places its label on many kinds of products that meet its standards.
The scenario’s character makes several stops during a day of running errands, and is faced with many
opportunities to effectively make charitable donations to overseas workers by opting for products that have
been fair trade certified.
If, during your discussion, few students seem to be in favor of paying the higher prices that go with the fair
trade items, ask question 5 “out of order” – would they likely do so in 10 years?
A student on a budget may closely guard a few dollars. But students like to imagine themselves as well off
in the years after graduation, and they may express an anticipation of being in a position to be more
generous in years to come.
It might be a nice touch to bring a bag of fair trade coffee, or some other fair trade item, to class.
Discussion Points for Scenario Questions
For all questions, assume that an organization like LWCC actually exists, you are aware of it and
trust it, and the organization has set up the kinds of programs described in the scenario.
1. If you were in Carol’s position, which of the jeans would you buy: the $70 “standard” pair or
the $72 certified pair? Why?
A. $70 – ISN’T $2 A SMALL AMOUNT THAT YOU WOULDN’T MISS?
B. $72 – WHAT IF IT HAD BEEN $75 FOR THE CERTIFIED JEANS?
2. Would you pay the extra quarter for the coffee? Why or why not?
A. NO – SURELY YOU WON’T MISS A QUARTER?
B. YES – WOULD YOU PAY AN EXTRA DOLLAR?
3. Would you make the $3 donation at the grocery store? If so, how consistently would you do
so? If not, why not?
A. WOULD MAKE THE DONATION – REGULARLY?
4. If an organization like LWCC came to prominence, how many people in general do you think
would usually pay the extra 3 percent for purchases? Most? Half? A few?
A. MANY PEOPLE – REALLY? AREN’T PEOPLE WATCHING THEIR
DOLLARS CLOSELY?
B. FEW – HOW MANY? 5%? FEWER?
5. Imagine that it is ten years from now. You are no longer a student, and you have been
earning a steady salary (or an increased salary if you are employed now) for several years.
Would you be more likely to spend the extra money in the three ways discussed in the scenario,
or would increased personal income not be a factor in this kind of decision?