Consider the implications of globalisation
for the world of work.
Since the introduction of the
International Labour Organization in 1919 (ILO, 2014), the idea of the ‘world
of work’ has become part of discourse. Despite much debate regarding
globalization, it is apparent that all nations have become increasingly
globalized in the last 30 years, especially with the rise of internet and
computing technology. Slaughter and Swagel (1997) describe globalization as the
international integration of goods, technology, labour and capital and which
can be seen everywhere. What is noteworthy here is that they mention the
international integration of labour, and so it is immediately evident that
labour has changed as a result of globalization. I will argue that
globalization has had major implications for the world of work arguing that
neither exist in a vacuum separate of the other, consequently leading to the
summary that the world of work is a complex structure from which globalization
has had a negative impact on.
The Race to the Bottom
‘The Race to the Bottom’ is a
central topic when debating globalization, and one from which many other topics
originate. The race to the bottom is discussed by many commentators, however,
Pearson and Seyfang (2009) expose the idea in the simplest form: the lowering
of wages and/or working standards by the state to attract investors and
companies from across the world. The argument here is that this is because of the
rise of Neoliberalism in the 1980s, which reduced the likelihood of countries
enforcing voluntary codes of conducts; “despite widespread ratification of many
of the labour standards conventions, adverse judgements from the ILO were
increasingly unenforced” (pp. 219). It is undeniable that the rise of
Neoliberalism in the 80s has played a key role in the idea of a race to the
bottom. By this, I refer to the policy agendas of pivotal nations such as the
presidency of Raegan in the US, and UK Prime Minister Thatcher, but more
importantly, the growing neo-liberal social policy from bodies like the International
Monetary Fund (IMF, 2014). As Pearson and Seyfang argue, the rise of
neoliberalism equated to the acceleration of flexible labour, through labour
market deregulation and restrictions on collective bargaining. This ties in
with globalization in that industrialized welfare states were no longer seen as
attractive when foreign direct investment could be made in East Asia, as well
as other developing parts of the world, where the low working standards and
lack of workers’ rights meant fewer costs of production. Additionally, Koechlin
(2005) talks about how the increasing ease of capital, goods and services
moving across national borders is a result of the advances in technologies of
transportation and communication, and it is this which has fundamentally changed
the geography of production. Henceforth, it is clear that we can see the
connection between the rise of neoliberalism and globalization; the increased
flexibility of the international labour market, and the changes in the
geography of production have resulted in the race to the bottom, whereby nation
states lower wages and working standards to attract foreign investors. And so,
the race to the bottom has had serious implications for the world of work. This
is most particularly the case, as previously discussed, in East Asia.
One of the greatest examples of how
the race to the bottom has implicated the world of work is in the development
of Indonesia. In the case of Indonesia, Pilger (2001) comments how Western
politicians and businessmen worked alongside Dictator Suharto to open up
Indonesian resources and labour market to America and the wealthy west. The
outcome led to high-street brands exploiting the cheap labour provided in
Indonesia, where it is reported that women and children are living on just 72
pence a day, with many children ‘undernourished and prone to disease’. Handayani
(2012) further discusses the statistic evidence of this in more recent times,
stating how the number of poor people in Indonesia is on the rise, as well as
absolute poverty reaching 43 million by 2011. International Development,
although distinct in its own right, has a noticeable overlap here in that
development is hindered, or restricted, by the globalization of labour,
specifically the race to the bottom as can be seen in Indonesia. Thus, in
summary, the implications of globalization on the world of work have not only
been of upmost importance, but there has also been negative products of
globalization with the race to the bottom devaluing human labour and life. With
these negative externalities still providing monumental barriers to
international development, it seems certainly possible to view the growth of
Capitalism in this way as a form of Capitalist Imperialism; the exploitation of
labour in the developing world by multinational corporations. And so, picking
up from a neo-Marxist perspective, it is socially and ethically apparent that
globalization has had a negative impact on the world of work.
The Welfare State
Globalization has had a very
significant impact on welfare states throughout the western world. George and
Wilding (2002) argue how the balance of power between capital and labour has
shifted as a result of globalization because the increased locational freedom
in a more global world has weakened the bargaining power of labour whilst
strengthening capital. George and Wilding use statistics about trade union
membership in the US in order to demonstrate their point; in the 1970s,
membership was around 35 million, but had fallen to a mere 15 million by the
1990s. This is explained through the ability of multinational corporations to
increasingly use locational threats to weaken trade union power and extract
concessions. Doogan (2014) discusses how Bronfenbrenner adds to the debate by
talking about the ‘précarité’ discourse, the idea of precariousness or
insecurity, whereby companies have created job insecurity through the threats
of relocating: a threat only possible because of increased capital mobility,
which in turn is the result of globalization. However this is not the only side
effect of the shift in the balance of power between capital and labour: “the
risk of losing credibility with the financial markets has been used by
governments to counter demands for improved benefits” (George and Wilding, pp. 49).
Without too much inference, it is obvious that the point being discussed is in
regard to the weakening of national governments to stand up in support of their
welfare system over multinational corporations. For instance, Swank (2005)
highlights how globalization has allowed for welfare state retrenchment because
by ‘economic logic’, social programmes and public spending “negatively effects
products, investment and job creation” (pp. 186). Once more, it is evident how
the race to the bottom argument can come up again, however it can be seen that
globalization is having more of an impact than just that discussion. So far it
can be seen that globalization has created a précarité society through the
shift in the balance of power, as well as indicating potential welfare state
retrenchment. However, from a broader approach, globalization has also
contributed to the collapse of social partnership.
An agreement to disagree is how
George and Wilding (2002) have expressed the relationship between labour and
capital; although complementary, their relationship also is one of inevitable
hostility. The implications for the welfare state and social construction of
each state do not seem clear at first, but because of the role globalization
has had, social partnerships come under much strain. The commentators emphasize
this by giving the example of Sweden during the rise of neoliberal economics in
the 1980s: because the Swedish system is traditionally both politically and
economically socialist, the rejection of industry seeking more flexible
production and investment strategies ultimately meant the model failed. For a
more recent example, George and Wilding point out how Germany with a historic
national consensus culture is being weakened by globalization. This is of much
interest because of the different make up between Germany and Sweden’s welfare
state – where Sweden can be described as Social Democratic, Germany are seen to
be Corporatist (Esping-Andersen, 1990). It is argued that what is emerging is a
‘competitive corporatism’, fitting in with an increasingly globalized society
with flexible labour and capital mobility, and so in turn giving “much less
emphasis to the redistributive aims of traditional corporatism” (pp. 50). The
welfare states of the two countries contrast in many ways in regard to their
approach to the provision of welfare, but are progressively coming under the
same attacks from multinationals to improve productivity and competitiveness.
And so it is ever apparent that globalization is having fundamental
implications on the welfare state because the welfare state has to break free
of its historic traditions in order to compromise for globalization. This
naturally means that the world of work is impacted too – because of the role
welfare states have in mostly delivering for those that do not work, such as
pensioners, the unemployed, and even to some extent the disabled, then changes
in the nature of the welfare state will in the long run change the nature of
labour and working. Thus we can summarise here that globalization is once again
having a negative impact on the world of work. This is because of the negative
externalities that come into play as a result of financial pressures from
capital, for example decline in trade union membership. As an extension of
this, the weakened power of labour also has created an insecure or précarité
society, and looking at welfare more broadly from across the western world, the
economic pressures of globalization are, so far, having negative consequences
for the nature of different welfare states.
Rising Inequality
The effects globalization has had
on the world of work are as explained, disadvantageously for the welfare state
and through the widespread concept of the race to the bottom. However, the most
effective way of establishing how the effects of globalization have had
negative implications on the world of work is through redirecting talk back to
generic reasons as to why globalization is harmful, as this leads to discussion
about labour. Rising income inequalities and wealth distribution are a result
of the combination of many factors already discussed – and they lead directly
into the world of work because they are continuously growing. This indicates
that the sheer nature of globalization is one in which capitalist imperialism
continues to exploit human labour, denying many workers the rights and wages
for which it could be argued they deserve.
One of the most pivotal thinkers on
the effects of globalization is Mishra (1999, 2009). Although a direct speaker
about the effects globalization has had on the welfare state, Mishra can also
be mentioned in the context of rising inequalities. In my opinion, this sits
distinct from the welfare state in that the rising inequalities as a result of
globalization are present throughout the world and not just in the states where
welfare provision may or may not have led to such wide income disparity.
Nevertheless, I’ll begin by using the statistics that George and Wilding (2002)
expose when they mention Mishra’s ideas of globalization increasing income
inequality; in the early 1970’s, households in the top 5% in the US earned 10
times that of the bottom 5%, but by the 1990s, they earned 15 times as much,
with similar income patterns present in the UK. Politizane (2012) produced a popular
statistical video last year when showing how the income distribution between
the top 1% and the rest of the country is extremely vast – the importance of
this is very high in that it demonstrates how the income inequality of wealth
distribution has continued to increase at an alarming rate between the 10 years
when George and Wilding debated the effects of globalization on income
inequality in 2002. But, it does not compare to the level of wealth
distribution when analysed from a global perspective. Maps such as the one
produced by World Mapper (2006) show the extent to which wealth is unfairly
distributed in the world (see Appendix 1). As can be seen in appendix 1, the
wealth of the US and western Europe evidently distorts the global picture, with
Africa appearing as just a mere line on the map, and other developing countries
such as those in south east Asia and South America hardly visible either. Mishra
(2009) examines the relationship between globalization and income inequality; it
can be argued that globalization has exacerbated the income inequality of the
world’s population primarily because of the race to the bottom, but also
because of the downward pressure on systems of social protection: the welfare
state. As already analysed, this has implications for the world of work because
it identifies the role globalization has taken in limiting international
development, with absolute poverty still similarly as problematic as it was
from the introduction of the Millennium Development Goals by the UN in 2000
(United Nations, 2014).
Conclusion
In conclusion, I reflect on the two
main approaches my argument has taken: how the race to the bottom and the
welfare state have both been negatively impacted as a result of globalization,
leading to wider disparity and growing income inequality. Whilst extending
these points, the ideas that international migration and immigrants, and the
changing relationship of the economic superpowers such as China and Brazil,
appear to have been neglected in discussion over the implications for the world
of work. Nonetheless, their implications do not necessarily contribute to the
main theme of my debate in that globalization has allowed for rising
inequality, something discussed as a consequence of ‘Capitalist Imperialism’. In
my opinion, whether you agree or not, the statistics regarding income
inequality are undeniable, whilst also being ethically, socially and morally
devastating. This is because they are ever growing. The implications that
globalization has had on the world of work are easily accessible in most
academic sources, whilst anecdotal evidence also appears to support the idea
that “the rich are getting richer, whilst the poor are getting poorer”. And so,
I finish by restating that globalization has had a negative impact on the world
of work because of increasing income inequality and disparity of wealth
distribution.
References
Doogan, K. (2014) Long
Term Employment Precariousness and Manufactured Uncertainty. [Lecture to
BSc Social Policy: Societal Change and the Transformation of Work] 17th
March.
Esping-Andersen, G. (1990) The three worlds of welfare capitalism. Cambridge: Polity Press
George, V., Wilding, P. (2002) Globalization and Human Welfare. Basingstoke: Palgrave.
Handayani, P. (2012) Beyond Statistics of Poverty. The Jakarta Post [online] 23rd
Feb. Available at: http://www.thejakartapost.com/news/2012/02/13/beyond-statistics-poverty.html
(Accessed: 18th March 2014)
ILO (2014) International
Labour Organization: Origins and History. Available at: http://www.ilo.org/global/about-the-ilo/history/lang--en/index.htm
(Accessed: 18th March 2014)
IMF (2014) Debt and
Painful reforms (1982-89). Available at: http://www.imf.org/external/about/histdebt.htm
(Accessed: 19th March 2014)
Koechiln, T. (2005) ‘US Multinational Corporations and the
Mobility of Productive Capital: A Sceptical View’, Radical Political Economics, 38:3, pp374-380
Mishra, R. (1999) Globalization
and the welfare state. Cheltenham: Edward Elgar
Mishra, R. (2009) ‘The
Logic of Globalization: the changing context of the welfare state’. In:
Yeates, N., Holden, C. (2009) The Global
Social Policy Reader. Bristol: Policy Press, pp. 275-280.
Pearson, R., Seyfang, G. (2009) ‘New hope or false dawn? Voluntary codes of conduct, labour regulation
and social policy in a globalizing world’. In: Yeates, N., Holden, C.
(2009) The Global Social Policy Reader. Bristol:
Policy Press, pp. 217-237.
Pilger, J. (2001) The New Rulers of the World. [Online
Video]. 18 July. Available from: http://johnpilger.com/videos/the-new-rulers-of-the-world
(Accessed: 1st March 2014)
Politizane (2012) Wealth
Inequality in America. Available at: http://www.youtube.com/watch?v=QPKKQnijnsM
(Accessed: 6th March 2014)
Slaughter, M., Swagel, P. (1997) Does Globalization Lower Wages and Export Jobs? Pamphlet, Economic
Issues 11, International Monetary Fund.
Swank, D. (2005) Globalization, Domestic Politics, and
Welfare State Retrenchment in Capitalist Democracies, Social Policy and Society, 4:2, 12 April
United Nations (2014) We
can end poverty: Millennium Development Goals and Beyond 2015. Available
at: http://www.un.org/millenniumgoals/ (Accessed: 19th March 2014)
World Mapper (2006) GDP
Wealth. Available at: http://www.worldmapper.org/display.php?selected=169#
(Accessed: 19th March 2014)
Appendix 1
GDP Wealth (2006) – this map shows territories wealth when
GDP is compared using currency exchange rates (courtesy of World Mapper).
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