General Article Fair trade myths and FAQs

Topic Selected: Globalisation
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As awareness of fair trade grows, so do misconceptions. These are some popular myths about fair trade and the realities behind them.

 

Myth: Fair trade is about paying developed world wages in the developing world

Reality: Wages are designed to provide fair compensation based on the true cost of production, and are not based on North American wage standards.

Fair wages are determined by a number of factors, including:

  • The amount of time, skill, and effort involved in production
  • Minimum and living wages where products are made
  • The purchasing power in a community or area
  • Other costs of living in the local context.

Myth: Fair trade siphons off American jobs to other countries

Reality: Fair trade seeks to improve the lives of the poorest of the poor who frequently lack alternative sources of income. Most fair trade craft products stem from cultures and traditions which are not represented

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