Sustainability and Worker Compensation in the Wine Business

vineyard workersWhy should the concept of sustainability apply only to environmental concerns?

This question is raised in a particularly helpful way by Jono Le Feuvre in his essay “The Human Factor.” He argues that sustainability should apply to working conditions and worker compensation as well. Writing about the dire circumstances of the wine industry in South Africa, he reports on a variety of programs to give vineyard and winery workers a stake in the businesses for whom they work.

In South Africa, the gap between rich people and poor people is the highest in the world, and the alcohol bans, instituted as a response to  Covid 19, have devastated the wine business. Some producers have responded by directing some of their profit to programs to help educate and support the income of their workers.

Stellenbosch winemaker and biodynamics pioneer Johan Reyneke underscores this beautifully: “Sustainability cannot just be about nature itself…In my view sustainability is a three-legged chair. (1) You need to look after nature; (2) you need to look after people; and (3) you need to look after your money. If you’re missing any one of those legs, the chair is going to fall over. Unfortunately, we get away with exploiting nature the longest. You can also exploit humans for a time. But the moment you run out of money, your business is over.

The article alludes to, but doesn’t quite make explicit, the reasoning behind connecting sustainability and worker compensation. The basic idea is that any society that creates a large underclass of workers who cannot buy the products they make is less wealthy than they could be. As that inequality grows, demand collapses and aggregate wealth plummets. In other words, economic prospects under conditions of extreme wealth inequality become unsustainable.

The connection between sustainability and limits on inequality is obvious but good luck trying to convince our corporate overlords of that. It’s inspiring that some members of the wine community in South Africa have figured it out.

I do strongly disagree with his final point:

In error, I began this piece by suggesting that certifications like the IPW should be structured to cover issues like employee compensation and working conditions. But these are the sorts of problems that can only ever be solved from within.

Looking at the projects that have achieved the most success in these areas, their common denominators are (1) honest intentions, (2) an attractive product of high quality and (3) a willingness to be proactive in their responses to the needs of the communities around them. These projects are not initiated by people who wait for external regulators to place imperatives on them. These are people who see the need and act to meet it; to restore dignity where it has been stripped away.

Problems of wealth inequality are collective action problems. They can only be solved by large numbers of people working together to solve them. Waiting on the good intentions of a few individuals will never succeed because too many people will be free riders benefiting from those good intentions but without incurring any costs themselves. As much as we hate them, regulations solve collective action problems—they give everyone an incentive to cooperate.

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