Can Labor Standards Improve Under Globalization?

    This is a question that's been on my mind for some time. As it happens, it is also the title of a 2003 book I just finished reading, published by the pro-free trade DC think tank, the Institute for International Economics, headed by the oft-quoted C. Fred Bergsten. It was written by Kimberly Ann Elliott and Richard B. Freeman, writers long established as sympathetic to the plight of workers in the US and abroad.

    I'll give away the ending by noting that the authors' answer to the question posed in the title is: yes. The book is about presenting facts, evidence and arguments supporting that conclusion, along with their recommendations on how more progress might be made more rapidly on improving labor standards* (see definition below) in less developed countries. At 138 pages it is a concise and, I found (starting with a limited knowledge base), fairly dense but non-technical read. It strikes me as an excellent primer on this issue.

    They argue that the "globalization vs. labor standards debate" poses the issue incorrectly. They argue both are necessary to raise living standards in developing countries. Globalization in this context includes the lowering of developed country trade barriers which make it difficult for developing countries to export. Labor standards will help to make sure more of the benefits of economic growth are shared by workers. They reject the view of some globalization enthusiasts that advocacy of labor standards is generally a stalking horse for protectionism, which they reject.

    Necessarily--due to the widespread lack of freedom to associate and bargain collectively for workers in developing countries--much of the leadership so far on anti-sweatshop campaigns in particular has come from activists based in developed countries. These groups have had some successes in getting multinationals to adopt codes of conduct which address some labor issues, and somewhat less success so far in ensuring that these codes are enforced. The extent of information and number of organizations who are monitoring implementation of these codes has increased over the past decade in particular.

    Their recommendations follow:

    1) Credit firms for improved conditions.

    2) Increase cooperation among monitors of labor standards. Competition has helped in this area, they maintain.

    3) Broaden the targets of antisweatshop campaigns. Antisweatshop activists should join with Oxfam America and the Jubilee movement to press for debt relief for poor countries, more open developed country markets for less developed country exports, and--working with pro-globalization enthusiasts on this issue--reduced subsidies to agriculture in developed countries which harms farmers in less developed countries.

    4) Bring about social audits for development bank projects (such as the World Bank). This can help ensure that the World Bank and other regional development banks play a stronger role in supporting improved labor standards.

    5) Turn Export Processing Zones (EPZs--areas of countries given reduced tariffs and other incentives to produce for the global market) into globalization at its best. EPZs have weak records on labor standards. This could start with a joint World Trade Organization-International Labor Organization baseline survey of standards in EPZs.

    6) Target trade-related violations of core labor standards in the WTO. Violations of core labor standards to attract foreign investment or promote exports are a trade distortion as much as subsidies or other forms of aid to traded sectors.

    7) Strengthen the International Labor Organization in the Internet Age. They suggest ways to use internet technology to empower workers, activists and consumers to raise labor standards in the global economy.

    I am in neither the uncritical pro-globalization camp nor the protectionist camp, but rather have tried to keep my eyes and ears open for alternatives which address the key problems with these more polar positions. This book has done more to help me learn about an alternative agenda which seems sensible to me than anything else I have read to date.

    I am trying to learn from my experience at tpmcafe by posting this as a "blog" entry rather than as a discussion post. I am glad to discuss with anyone who wants to but acknowledge up front my limited knowledge base on the issue. I am thinking of this mainly as an information item for people interested in this issue at the cafe who might welcome practical suggestions on how to learn more. There seem to be a goodly number of folks interested in this issue at the cafe.

    *There are four "fundamental principles and rights at work" identified in a 1998 agreement signed by 175 member countries of the International Labor Organization. These are in some contexts treated as synonomous with the term "core labor standards". They are:

    i) freedom from forced labor

    ii) nondiscrimination in the workplace

    iii) the effective abolition of child labor; and

    iv) freedom of association and the right to organize and bargain collectively

    Latest Comments