Pairing the “consume less but better” precept to an economic mechanism      

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The current challenge, which consists in slowing down the perfect storm of excess consumerism can be taken on by acting on modes of consumption and production. Granted, we need to learn new ways of consuming, but we can assume that the recommendation to “consume less, but better” won’t be enough. Consumers don’t always have a choice, and often have to settle for the low-cost, disposable offer with built-in obsolescence that is imposed by brands and warehouse stores. 

The best way to re-achieve equilibrium is to have an impact at the beginning of the consumer chain. We need to come up with economic mechanisms that will, in the long term, produce the desired effect.

Before the massive outsourcing of the manufacturing of consumer goods, the low coefficients applied to calculating production costs were fairly standard within each profession. Taking into account both a minimum wage and traditionally fairly high production quality, the final sales price was reasonably close to the actual cost of the item, and consumerism was essentially self-regulating. 

Nowadays, sales prices are determined by the market’s psychological price (the amount consumers are willing to spend). It is no longer unusual to pay 10 to 20 times an item’s production cost. Granted, import duties used to participate in moderating global production, and it must be acknowledged that it would now be almost impossible to restore the former transparency and equilibrium into the current free-trade context. It would, however, be possible to aim in that direction by nudging businesses towards properly re-pricing products, which would then lead to considerable decreases in waste and over-consumption. 

When labor costs are very low, industrials tend to pay less attention to the quality of item’s design and production, meaning they are subsequently fairly flimsy. The often find a purchaser nevertheless, and if not, they are destroyed. A global minimum wage would encourage reducing the production of disposables. The wage would have to apply specifically to the manufacturing of items for exportation, and countries would be classified by average-wage category. Heads of state of emerging nations would be aware of the human and philosophical dimensions, in addition to the economic one. The advantages and benefits of a decent salary – a source of new tax revenue and of financial development funded by increased contributions from the purchasers (retailers, rather than consumers) – would be very convincing.

In the long term, a global minimum wage would generate a positive macro-economic effect on the standard of living of entire populations. Nevertheless, considering what a small fraction of the final price workers’ salaries represent, the price to consumers would barely change.

Granted, a global minimum wage is not a new idea, and even though a large share of the world’s population agrees that establishing one would be desirable, the lack of a viable project has meant that little progress has been made.

The project that has now been all but forgotten, but for decades was recommended by international bodies and some economists, is the idea of a minimum wage based on each country’s median income.

But so far, the infinitely complex process has brought only proportional progress to countries whose standards of living started out very low.  

In several countries, an increase of $15 or $30 brought very little improvement to disgraceful working conditions. In addition, a salary that certain poverty-stricken governments cannot afford to pay their civil servants, or that businesses manufacturing goods for the local population could not pay their employees, obviously has little chance of either coming into existence or, if it did, of being sustainable.

Francis JOURNOT -  "International Convention for a Global Minimum Wage" 

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