Category Archives: Globalization

The Surprisingly Swift Decline of US Manufacturing Employment

Source: Justin R. Pierce and Peter K. Schott, American Economic Review, Vol. 106, no. 7, July 2016
(subscription required)

From the abstract:
This paper links the sharp drop in US manufacturing employment after 2000 to a change in US trade policy that eliminated potential tariff increases on Chinese imports. Industries more exposed to the change experience greater employment loss, increased imports from China, and higher entry by US importers and foreign-owned Chinese exporters. At the plant level, shifts toward less labor-intensive production and exposure to the policy via input-output linkages also contribute to the decline in employment. Results are robust to other potential explanations of employment loss, and there is no similar reaction in the European Union, where policy did not change.

Who’s responsible for child slavery?

Source: Al Jazeera, Inside Story, June 12, 2016

Almost one in 10 children wakes up each morning and goes to work. These children slave away in factories and fields, and as maids and sex workers. United Nations declarations specifically guarantee the rights of a child to be protected from economic exploitation. But vague laws, or sometimes a complete lack of legislation, mean that millions of children find themselves at work when they should be at school – often in hazardous conditions. At least 168 million children around the world work, with more than half of them in dangerous conditions, according to the International Labour Organization. Almost 80 million children are working in the Asia-Pacific region. That’s equivalent to the entire population of Turkey. And one in five children in Sub-Saharan Africa has a job. That’s almost 60 million children. The agriculture business is the biggest employer. Sixty percent of child labourers – nearly 100 million children – tend to farms and animals. But a lot of children, around 66 million, are also working in the service and industry sectors. What does it take to end child slavery?

Eradicating Child Labor in Supply Chains Requires Binding, Enforceable Standards

Source: Sonia Mistry, Solidarity Center, June 10, 2016

…..Unions are key partners in eradicating child labor through the promotion of decent work for adults and advocacy for improved government policies. Workers are the best workplace monitors, capable of identifying violations, including child and forced labor. Through collective bargaining, unions have engaged employers to address many of the root causes of child labor, including inadequate access to education, low wages and excessively high production quotas.

On this World Day Against Child Labor, I offer the following solutions for stakeholders seeking to eradicate child labor in supply chains:

Businesses—Work with unions and independent workers’ organizations to develop binding and enforceable standards, such as through collective bargaining agreements. Precedent for other forms of enforceable agreements has also been set in the garment industry, for example, where clothing brands and unions signed on to the Bangladesh Accord on Fire and Building Safety.

Governments—Ensure that all workers, including those in informal sectors, are covered by labor law protections that adhere to international standards. Enforce those laws to promote accountability.
Consumers—Contact companies and government officials to advocate for the actions noted above. When making purchases, look for the union label because it means workers had a role to play in upholding standards in their part of the supply chain.

In the Congo, where government regulation was severely lacking and companies did not trace informally mined minerals that ended up in their supply chains, it was the teachers union that played a key role in helping thousands of children, like the little boy I met, gain access to education. By advocating for regular payment of wages so that teachers did not have to charge school fees to survive and parents could afford to keep their children in class, the union chose to take on one of the drivers of child labor rather than simply seek a stopgap…..
Ending Child Labor: The Dirty Business of Cleaning Up Supply Chains
Source: Nina Smith – GoodWeave International, Huffington Post, June 10, 2016

Made by Children. Instead of Made in China or Made in India, what if this was the label inside the neatly stacked sweaters on a department store shelf?

For most major brands, such a designation would be accurate. Despite companies making large investments to secure ethical supply chains, the International Labour Organization estimates that 168 million child laborers and 21 million forced laborers are still toiling in the global economy….

ILO: Ending child labour in supply chains is everyone’s business
Source: International Labour Organization (ILO), Press Release, June 8, 2016

This year, the focus for World Day Against Child Labour – marked on 12 June – is on child labour and supply chains. With 168 million children still in child labour, all supply chains, from agriculture to manufacturing, services to construction, run the risk that child labour may be present.

The Cost of Free Trade

Source: Joel R. Paul, University of California Hastings College of the Law, UC Hastings Research Paper No. 162, February 8, 2016

From the abstract:
The two misconceptions — that globalization is unprecedented, accelerating, and predetermined and that trade benefits everyone — form the central justifications for negotiating free trade agreements. In fact, there is little evidence to support either of these assumptions. When we begin to scrutinize them more closely, we find that their application leads to an international legal structure that routinely undermines national standards for protecting workers and the environment. I do not mean to suggest that international trade is a bad thing. In fact, under the right circumstances global trade can increase competition and give consumers a wider choice of goods and services at lower prices. Instead, I argue that it is possible to reform our trading system in order to both increase competition and raise regulatory standards to benefit developing as well as industrialized countries.

Why Tech Professionals Now Share A Fate With The Working Class

Source: Tamara Draut, Fast Company, March 30, 2016

What happened to manufacturing jobs a generation ago is now being repeated in the knowledge economy. … Companies are now sending many so-called “skilled” positions offshore, including once high-paying jobs in the financial and tech sectors. The transfer to cheaper sources of once-safe occupations is just one of the ways work has become less secure for many people in the middle class…..

The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade

Source: David H. Autor, David Dorn, Gordon H. Hanson, National Bureau of Economic Research (NBER), NBER Working Paper No. 21906, January 2016
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From the abstract:
China’s emergence as a great economic power has induced an epochal shift in patterns of world trade. Simultaneously, it has challenged much of the received empirical wisdom about how labor markets adjust to trade shocks. Alongside the heralded consumer benefits of expanded trade are substantial adjustment costs and distributional consequences. These impacts are most visible in the local labor markets in which the industries exposed to foreign competition are concentrated. Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in U.S. industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize. Better understanding when and where trade is costly, and how and why it may be beneficial, are key items on the research agenda for trade and labor economists.

The Future of Work and Workers

Source: Pacific Standard, 2015

A special project in which business and labor leaders, social scientists, technology visionaries, activists, and journalists weigh in on the most consequential changes in the workplace.

Articles include:
Stagnation, Automation … Frustration
Source: Steven Greenhouse, August 27, 2015
….Let’s explore two major workplace issues, starting with wage stagnation. This is a huge problem, and unfortunately many Americans don’t realize how serious it is. Wages for the typical worker are up just 1.6 percent over the past six years, and, believe it or not, after-inflation wages remain below where they were in 1973. Try to raise a family on that. Median household income—$52,250—remains 8.6 percent or nearly $5,000 below its peak back in 2000. Forty-two percent of American workers earn less than $15 an hour—that translates to just $31,200 a year for a full-time worker…. One doesn’t have to be an Einstein to realize that wage stagnation has contributed to America’s income inequality—the worst it’s been since the Gilded Age of the 1920s. … A second major issue: the effects of automation. For more than a century, economists have maintained that new technologies create as many jobs as they destroy. …

The World Needs a New Business Model
Source: Sharan Burrow, Pacific Standard, August 26, 2015
….The world needs a new business model. The world’s GDP has trebled since 1980, yet inequality is at historic levels. The hidden workforce of the richest companies in the world work long hours for poverty wages, too often in unsafe environments or with unsafe products…..

Creative Destruction and the New World of Work
Source: John Irons & Alyson Wise, Pacific Standard, August 25, 2015
….With technology proliferating at an increasingly rapid pace, we face a pressing need for modernized labor laws, systems, and organizations that will promote greater resilience and inclusion. Creating these will require us to re-frame, re-imagine, and build upon Joseph Schumpeter’s notion of creative destruction. This is both a challenge and an opportunity for the 21st century…..

Preparing Students for a Changing World of Work
Source: Freeman A. Hrabowski III, Pacific Standard, August 24, 2015
Our nation’s workforce continues to evolve in a workplace transformed by new ideas, products, processes and services—the offspring of our highly productive innovation ecosystem. At the same time, the workforce is affected by increasing globalization and major demographic shifts—including an aging Baby Boomer generation and growing minority and immigrant populations. These changes have created a more competitive economy that affects the substance and conditions of the work we will do across occupations, the participation of underserved groups in the economy, and the ways colleges and universities prepare students for careers….

Caring for the Crowdworker Going It Alone
Source: Mary L. Gray, Pacific Standard, August 21, 2015
…..While we must develop robust mechanisms that prevent individuals from scamming platforms in the on-demand economy, we must with equal vigilance penalize employers for misclassifying, delaying, or failing to pay workers, one of the greatest challenges facing those making a living at freelancing today. Supporting the many people who may never enjoy the security of a 40-hour workweek will be one of the most important conversations we have about the on-demand sharing economy…..

Shorter Hours, Higher Pay
Source: Dorothy Sue Cobble, Pacific Standard, August 20, 2015
Most Americans work too much and are paid too little. Reversing these trends is the most important thing we can do to improve the lives of workers and their families today. Time and money are connected but not in the way we often think. For all too long we’ve been trying to raise our pay by lengthening our hours. In truth, we need to shorten our hours. Then and only then will we be able to raise our pay…..

Organize the Immigrant Workers
Source: Kent Wong, Pacific Standard, August 19, 2015
….The United States is home to 11 million undocumented immigrants. A national campaign for legalization and a path to citizenship has repeatedly been blocked in Congress. But immigrant workers are actively forming and joining unions. Their emergence as a powerful force bodes well for the future of the U.S. labor movement and is an inspiration to other workers struggling for justice and dignity in the U.S. and throughout the world. ….The American labor movement will be well served if it continues to advance an aggressive campaign to organize immigrant workers and to build a new labor movement for the new working class…..

The Transformation of Work at the Heart of Middle East Unrest
Source: Ragui Assaad, Pacific Standard, August 18, 2015
He is a 28-year-old Egyptian with a degree in sociology. He graduated six years ago and has since had three jobs as a waiter in various Cairo coffee shops and restaurants. He wants to marry but can’t convince his sweetheart’s parents he is ready, given his employment situation. He lives with his parents, both government employees who will soon retire with government pensions. He, on the other hand, can only dream of a job that would guarantee him a pension. Millions of educated youth like this find themselves shut out of the middle class because of an inability to convert their education into the kind of decent job their parents found a generation ago. Even as access to education has expanded dramatically in the region, the quality of employment for educated workers has deteriorated markedly. I’d argue that the gap between what these young people expected for their education and what they have achieved is the main source of the anger and frustration driving the Arab uprisings….

Who Owns the Robot in Your Future Work Life?
Source: Richard Freeman, Pacific Standard, August 17, 2015
….The key to whether we all benefit from robots at work or whether robots exacerbate the inequality of income between the super-wealthy few and the rest of society depends on who owns the robot. The first law of a robotized labor market is that as artificial intelligence and computing power improve, robots will better substitute for human work. The second law is that technological progress will reduce the cost of the robot substitutes over time. The third law, a corollary of laws one and two, is that the wages of workers in occupations undergoing robotization will fall…..

Labor Law Must Catch Up
Source: Richard L. Trumka & Craig Becker, Pacific Standard, August 14, 2015
American workers will continue to become more productive as the digital revolution advances. But United States labor law must be reconstructed to recognize changes in work and the employment relationship and to once again effectively permit workers to organize and designate representatives to bargain with their employers. Otherwise, workers will not share the increased income generated by their productivity, ultimately threatening economic growth….

The Water Cooler and the Fridge
Source: Mario L. Small, Pacific Standard, August 13, 2015
….The simple opportunity to run into others may be one of the most overlooked privileges of modern work life, and the one aspect of the office that work from home can rarely replicate. The water cooler chat became ubiquitous in the workplace because talk, as water, sustains life. One cannot run into colleagues on the way to one’s refrigerator….

We Have Been Here Before
Source: Paul Saffo, Pacific Standard, August 12, 2015
This is not the first time society has fretted over the impact of ever-smarter machines on jobs and work—and not the first time we have overreacted. In the Depression-beset 1930s, labor Jeremiahs warned that robots would decimate American factory jobs. Three decades later, mid-1960s prognosticators offered a hopeful silver lining to an otherwise apocalyptic assessment of automation’s dark cloud: the displacement of work and workers would usher in a new “leisure society.”….

Why Wages Aren’t Keeping Up
Source: Robert Solow, Pacific Standard, August 11, 2015
One of the more puzzling and damaging features of the American labor market in the last few decades has been the failure of real (i.e. inflation-adjusted) wages and benefits to keep up with the increase in productivity. …. The custom is to think of value added in a corporation (or in the economy as a whole) as just the sum of the return to labor and the return to capital. But that is not quite right. There is a third component which I will call “monopoly rent” or, better still, just “rent.” It is not a return earned by capital or labor, but rather a return to the special position of the firm. ….The suggestion I want to make is that one important reason for the failure of real wages to keep up with productivity is that the division of rent in industry has been shifting against the labor side for several decades. This is a hard hypothesis to test in the absence of direct measurement. But the decay of unions and collective bargaining, the explicit hardening of business attitudes, the popularity of right-to-work laws, and the fact that the wage lag seems to have begun at about the same time as the Reagan presidency all point in the same direction: the share of wages in national value added may have fallen because the social bargaining power of labor has diminished. This is not to say that international competition and the biased nature of new technology have no role to play, only that they are not the whole story. Internal social change and the division of rent matter too…..

A Nightmare Scenario—and Three Things That Might Prevent It
Source: Andrew Schrank, Pacific Standard, August 10, 2015
What worries me most about the future of work and workers is the possibility that the technological determinists are right, or that scientific innovation will outpace social adaptation and wreak political and economic havoc. Skilled as well as unskilled workers would be replaced by robots and computers. Jobs that couldn’t be automated would be outsourced to the lowest bidder, whether in Boston, Barranquilla, or Bangalore. The profits would be captured by “supermanagers,” who would increasingly dictate their own salaries as well as the salaries of their subordinates. And the average worker—or former worker, as luck would have it—would be left to pick up the pieces: overqualified, underemployed, or just plain out in the cold. …

Making Service Work Pay
Source: Lydia DePillis, Pacific Standard, August 7, 2015
…And what if this trend continues? What if the new opportunities available to the Skillet Johnsons of the world continue to be low-paying positions with little opportunity for advancement? With the exception of registered nurses, the 10 highest-growth occupations for the next decade make less than $33,000 per year, according to the Bureau of Labor Statistics. That’s not the kind of employment base you need to rebuild a middle class. Part of the answer is better, cheaper education to match people with higher-paying jobs where there’s more demand, like nursing or computer programming. But Johnson thinks there’s another piece of the puzzle: Transforming those low-paying jobs into careers that can support a family. …

New challenges, new alliances: union politicization in a post-NAFTA era

Source: Tamara Kaya, Labor History, Volume 56 Issue 3, 2015
(subscription required)

From the abstract:
The ascendency of neoliberalism, anti-state ideologies, and increased corporate power has taken its toll on labor movements around the globe. Today, the proportion of unionized workers in Organization for Economic Co-operation and Development countries is half what it was in the 1970s. I argue that unions are dealing with the crises presented by neoliberal economic integration by entering new political coalitions and nontraditional advocacy areas – particularly relating to immigration, environment, and trade – in an effort to increase their relevance, influence, and allies. I examine how the North American Free Trade Agreement helped politicize unions to move beyond traditional workplace-centered struggles and engage in broader and more diverse political struggles linked at the domestic and the transnational level. Union positions vis-à-vis immigrants have shifted dramatically from supporting draconian legislation to leading a broad-based movement for immigrants’ rights. Key unions joined with environmental organizations to advocate for environmental and worker protections through a green economy and green jobs; unions continue their fair trade advocacy, fighting the Tran-Pacific Partnership and the Trans-Atlantic Free Trade Agreements and investor–state enforcement mechanisms. In an interesting and important twist, unions’ foray into these new arenas in part results directly from the privatization of governance practices, which has undermined democratic processes across the continent.

Making Free Trade Worker Friendly

Source: William A. Douglas, Challenge: The Magazine of Economic Affairs, Vol. 58 Issue 3, May-June 2015
(subscription required)

From the abstract:
Could the world adopt a new trade model that is not based on low-wage production and yet still allow adequate exports from low-wage nations? The author presents such an innovative idea. Implementing it would be no easy matter, but it is provocative in a world that has been mired in a theoretical quagmire.