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What is the MOST SIGNIFICANT difference between these two coin purses?
 
$0.38 $2.00
- One costs $1.62 more than the other.
- One was purchased in the market in Guatemala and one from a fair trade cooperative.
- One helps Guatemalans break out of the continuous cycle of poverty and the other keeps them in it.
HINTS:
- The weaving of either coin purse requires two hours.
- The sewing of either coin purse requires ten minutes.
- Bringing the product to market and/or finding a buyer requires additional time.
- Both coin purses require $0.30 in materials.
Background:
The coin purse on the left sells for $.38 in the market. That price leaves only $.08 to compensate all the people who helped to produce and bring the coin purse to market, but only after transportation, energy and sewing machine costs are covered. What will $.08 buy in Guatemala? Only 2 plain corn tortillas, without beans, without anything. Only the tortillas. Not enough to sustain a child for one meal. It seems incredible that anyone would work so hard for so little benefit. But competition in Guatemala is fierce. Artisans and middlemen are poor and desperate. They know they have to sell at the lowest price possible or someone else will. Thus, they are trapped in the cycle of poverty.
The purpose of cooperatives is to band artisans together to set prices in order to begin to compensate those who bring the product to market with a reasonable wage. As you can see from the breakdown, the wages are still modest but they can provide the basic necessities that mean the difference between a mal-nourished, chronically ill family and a healthy family.
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