Shoes & Solutions

Tomorrow, April 21, 2015, students across the campus of Northwest Missouri State, my Alma mater, will forego shoes in an effort to raise global awareness for children’s health and education. Organized by Toms Shoes, men and women across the United States will take off their shoes to alert their peers about the impact of shoes on a child’s life.

Beyond the stinking feet and the “no shoes, no service” ban in the student cafeteria, “One Day Without Shoes” is causing many problems.

It’s not just “One Day Without Shoes,” but the entire Toms buy-one-get one model.

In 2006, Toms was created to solve a social problem: children without shoes. While visiting Argentina, Blake, the company’s founder, saw this issue and had a vision for a business model. For every shoe it sells, Toms gives one away to a barefoot child in a developing country.

This sounds like a wonderful, charitable organization. “What’s wrong with giving away shoes to needy children?” you may ask.

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In fact, in giving away shoes, Toms is actually undermining local economies by providing a short-term solution to a long-term problem. By undercutting local prices, Toms is hurting local manufacturers, distributors, and sellers of shoes.

As Time noted, “an increasing number of foreign aid practitioners and agencies are recognizing that charitable gifts from abroad can distort developing markets and undermine local businesses by creating an entirely unsustainable aid-based economy.”

Contrary to popular belief, Toms isn’t actually a company designed to build the economies of the developing world. As a for-profit company, it would be unable to sustain revenues under this business model. In reality, Toms’ model is built on making western consumers feel good.

Unfortunately, western consumers feel good at the expense of children in the developing world.

But what’s the solution to this issue? As a Peace Corps Volunteer, you may think I have all the answers to these development questions. However, in all actuality, I probably have more questions than you.

Let’s try to tackle this problem together.

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Firstly, let’s understand the issues. Toms points out that children without shoes are at risk of contracting hookworm and other foot diseases. But simply providing a pair of shoes will not eradicate hookworm. Only vibrant, local economies with knowledge about these problems will have the power to create real change.

Lack of shoes is not the problem.

Secondly, let’s consider different business models. Toms could build more manufacturing facilities in developing countries. Currently, Toms has six factories for the more than sixty countries it donates to around the world. That’s less than one factory for every ten countries.

More factories means more people are employed in local economies.

Over the course of the past couple decades, a new business had popped up all over Africa: the trade of second-hand clothes from more affluent Western countries. In Senegal, these small boutiques and market stands are called fukinjays.

Clothes arrive from the United States, Europe, and even some Asian countries in cargo containers. After arriving at the port, middle men purchase bales of clothes, break them down, and sell them to vendors around the region. After passing through many middle men, these hand-me-downs arrive in local markets.

Although it may appear as if this is just as damaging as Toms, this industry is actually boosting local economies.

Second-hand clothes sold in a market. Photograph: http://www.compassion.com/haiti/port-au-prince.htm

Second-hand clothes sold in a market. Photograph: http://www.compassion.com/haiti/port-au-prince.htm

In her book, The Travels of a T-Shirt in a Global Economy, Pietra Rivoli describes this as the only time in a T-shirt’s life that it encounters a truly free market.

A nice pair of khaki pants may be sold for $5, a local fortune, while the jersey of a losing sports team will fetch a lower price than that of a winning one.

Each unique item is sold at the equilibrium price – where both buyers and sellers are happy with the price and quantity – unlike when a T-shirt lives in the commodity markets of cotton and manufacturing. This industry is dominated by small entrepreneurs while large foreign firms face high barriers of entry.

Although this fukinjay system is controversial – a few African governments have banned it to protect local garment businesses – it creates many jobs, 24,000 in Senegal alone, while providing low-cost clothing and shoes for men and women and children across sub-Saharan Africa.

As you can see, dumping free shoes in developing countries won’t solve these problems. The fukinjay system may be a possible solution, while continued health education and job creation for entrepreneurs is surely in the best interest of developing countries as well as the entire global economy.

The impact of Toms in the developing world is only one of many ongoing debates within the international development community. Aid, whether in the form of roads, schools or maternal health is a constant subject of consideration at any world forum.

This blog post can’t even begin to touch on the many issues faced in local economies.

With all of my heart, I believe the wearers of Toms want to do good. This post isn’t meant to offend or do harm, but to invite you to join the international community in making our world a better place. At the end of this post, you can find further readings.

In light of this, tomorrow, keep your shoes on. Instead, let’s look for the solutions to improve the lives of children all over the world that businesses like Toms can provide in partnership with local economies.

And to look for solutions, you’re gonna need your shoes.

Further reading:

The Case of TOMS Shoes in El Salvador
The Impact of Second-Hand Clothing Trade on Developing Countries
The Economics of TOMS Shoes
Aid to the Rescue

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2 thoughts on “Shoes & Solutions

  1. Well said! Much boils down to the developped world thinking their ideas will ‘help’ (and make a profit!) – but the missing link is the cultural difference. Direct aid is not the solution – assistance and training for growth and development, all within the African Culture, is the road to success. I think our ‘international business gurus’ would profit from listening to first-hand experience and observations of PC ‘boots on the ground’! Thanks for this post, Liz!

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