Question

Compare the earnings per shirt of the worker in the garment factory, the garment exporter, and the business person in the market abroad. What do you find?

Answer 1

Hint: Whenever a product is produced it goes through various stages before it reaches the customer. The farmer first produces the goods and sells it to the wholesaler then it goes to the garment exporter followed by a multinational company and ultimately it reaches the customer. The profit gained keeps on increasing with each stage.

Complete answer:
The business person abroad makes a profit of Rs. 600 on one shirt which is owned by the multinational company. They are the group of people who earn the highest profits. The garment exporter gains a profit of Rs. 100 on one shirt when he sells the shirt at Rs. 200. This amount is good enough to meet the basic needs of the people.

 The remaining Rs. 100 is shared as follows; The cost for buying raw materials and clothes is Rs. 70 per shirt. The cost of running an office cost him Rs. 15 per shirt and So far as the worker’s earning is concerned, he gets only Rs. 15 per shirt. The person who actually produces the goods get a very small amount which is not fit enough to meet even the basic necessities of their lives.

We see that there is an unequal distribution of profit among different stages of sellers. Business groups look for suppliers who will provide them goods at cheapest cost and they will sell them to people who belong to upper class families. Hence, they manage to get the maximum profit. On the other hand, the farmers are not literate enough to understand business and they end up receiving very small profit for their work.

Note: Small farmers usually depend on local traders for help which is a main reason that they don’t get enough profit. They take loans with high interest from local traders in need of emergency which is very difficult for them to pay back. Whenever there is illness in the family, they approach local traders. They also suffer from seasonal unemployment.