Question

Can living wages factory like Alta Gracia Apparel sustain in the long-run? If yes, why? If no, why?

Answer 1

Alta Gracia Apparel, a United States owned garment factory in the Dominican Republic treat its workers decently and pay a living wage. Moreover gives additional benefits such as they can freely unionize, get a minimum of 14 paid vacation days and allowed for access to medical insurance. Consequently the production costs at Alta Gracia’s were 20-30 percent higher than its rivals. However the employment arrangement at Alta Gracia Apparel is recovered through operating efficiencies. The good working conditions motivate the workers to be more productive; and as a result in the long run won’t need supervision. When employees takes the responsibility for their quality and productivity of work, and it as a result eliminates at least one layer of supervision and decreasing costs of defective and waste merchandise. Furthermore, the workers are less likely to leave the company they won’t need to train new people, and would lead to a decline in cost of training and backup labor. Thus in my opinion the living wages factory like Alta Gracia Apparel can sustain in the long-run