by John Landefeld and Katharine Burmaster
There’s an economic revolution happening in a small apparel factory in the city of Villa Altagracia, in the Dominican Republic. Three years ago, the Alta Gracia factory became the first apparel factory in the developing world to pay their workers a living wage, one calculated to meet a family’s basic needs. In Alta Gracia’s case, this living wage is 3.5 times the prevailing wage in other factories in the Dominican Republic and was calculated to provide adequately for a family of four. In U.S. dollars, this amounts to a wage jump from $216/month to $759/month. Such a significant increase in income clearly benefits workers and their families, but there are upsides for employers as well. Paying a living wage attracts a highly skilled and productive workforce, decreases training and oversight costs, reduces rates of turnover and absenteeism, and satisfies customer demand for ethically sourced goods.
In addition to the economic impacts of this new model of apparel manufacturing, we believe that the practice of paying workers a living wage will improve the health of these workers. Centuries of experience and decades of research have demonstrated that being poor is bad for one’s health. Higher income has been associated with myriad improved outcomes, from life expectancy to chronic disease to mental health. As a result, many development programs targeting health disparities appropriately aim to increase income. Most of these involve government- or NGO-directed transfers of cash to the poor, usually as grants, but occasionally in the form of microcredit. The magnitude of these cash transfers and loans tend to be between 5 and 40 percent of the gross monthly income of the recipients. The Alta Gracia model is clearly different in three major ways. First, the change in income is much larger, around 350 percent of the prevailing wage. Second, the wage is from a private, for-profit organization rather than a government or non-profit. Third, the increased income is neither a grant nor a loan, but a fair wage compensating hard work.
Over the past two years, we’ve analyzed survey data from the workers of Alta Gracia to better understand how the living wage at Alta Gracia is changing the lives and health of the workers. In many instances, the results of these analyses have prompted further questions. We wondered what the workers valued most about the new model, what they saw as their greatest health concerns, and how the workers’ roles in the broader community have changed since the factory opened.
We traveled to Villa Altagracia this summer to spend time with the workers to begin to answer these questions. Through the course of interviews and meetings with workers and union leaders at Alta Gracia, we were able to learn about how they think about depression and mental health. Workers elucidated their nuanced understandings of “status” and “stress,” concepts which have extensive implications for health but the definitions of which are extremely culturally dependent. The highlight of our time at Alta Gracia was presenting the preliminary results of our study to over 60 workers and receiving their feedback and questions, all of which will be invaluable in future publications on this project.
Alta Gracia represents a new model for the apparel industry. Perhaps even more importantly, it has provided a rare opportunity for a partnership between business leaders, activists, workers, and policymakers that is both pro-business and pro-development. We believe this partnership should be expanded to include public health researchers, and we hope that our work, supported this summer by the Tinker Grant, will provide evidence for the health benefits of such living wage interventions.
John Landefeld and Katharine Burmaster are graduate students in the Joint Medical Program at UC Berkeley and UC San Francisco. They received Tinker Grants from CLAS to travel to the Dominican Republic in the summer of 2013.