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How business - and consumers - can wipe out poverty

by Sheeza Shah | UpEffect
Friday, 15 June 2018 12:00 GMT

Relatives of victims killed in Rana Plaza building collapse in 2013, mourn at the site during the fourth anniversary of the collapse in Savar, on the outskirt of Dhaka, Bangladesh, April 24, 2017. REUTERS/Mohammad Ponir Hossain

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* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

Businesses need to act responsibly, but consumers can also play their part in fighting inequality.

Today, accumulated wealth sits in a small number of pockets around the world and the gap between the rich and the poor has widened. More than 82% of wealth created in 2017 went to 1% of the world’s population.

Half the world is still living in poverty while a relative handful reap excessive wealth. The trillions of dollars spent on philanthropy and aid worldwide has done little to bridge this gap, and poverty remains the largest moral crisis of our time .

People, with the best of intentions, donate money to nonprofits supporting impoverished communities with the hope that it will aid the poor, but sadly much of this capital has been lost in unsustainable programmes, administration or report tickboxing; ultimately failing innumerable communities and trapping many in an endless cycle of poverty.

Grassroots organisations are typically underfunded, while many well funded programmes have limited understanding of community problems and have built solutions to problems without including or understanding local needs.

Beyond the unsustainability of charitable programmes, donations and aid do little to equip individuals with financial independence. A person can only come out of poverty if he or she is able to pursue income generating opportunities that advance their status in society, so that they can walk shoulder to shoulder with the average man and woman.

One way to tackle this is for businesses to create dignified employment opportunities for the poor which many businesses have failed to do. In fact, today’s corporations are built on capitalistic models and high profit margins which are dependent on cheap labour and supply chains.

Businesses are very much aware that more than three billion people live on less than $2.50 a day, are desperate for basic necessities and are willing to pursue any means for acquiring small income for their families.

This positions the poor as ideal labourers for corporations bent on increasing wealth and is why millions are subjugated at the hands of companies who are exploiting their precarious conditions. Middlemen have built wealthy empires by tripling their income at the expense of the poor who are forced to live on less than minimum wage and work in inhumane conditions.

Although we’re seeing a surge in ethical businesses, especially in light of Fashion Revolution, we consumers need to do more and actively vote with our wallets by consuming brands that end the poverty cycle for communities.

We can’t afford to wait for another tragedy like the 2013 collapse of The Rana Plaza building in Bangladesh which killed 1,129 garment workers churning out clothes for many world-renowned fashion brands.

Businesses have the means and resources to lift people out of poverty but choose not to for increased profitability.

Such corporations will only make a drastic change if consumers boycott unethical brands and increase demand for businesses prioritising fairtrade and ethical supply chains, ultimately driving profits down and forcing more businesses to join the movement in order to remain profitable.

Businesses must build human-facing policies that provide living wage opportunities for the poor, accommodate their child-care needs and fund educational scholarships and skill-training programmes to help men and women become financially independent.

If consumers increase demand for ethical businesses, we can positively transform thousands of communities. No man or woman would go to sleep hungry. 

The poorest in society should be able trust that the system would not forget them and we consumers have the power to build a world of financial equality and economic prosperity for all.

Sheeza Shah is the founder and CEO of UpEffect, a crowdfunding and support site for social enterprises.