Global Labor Standards Labor Standards

Global Labor Standards

Labor standards at no given time should demand too little of industrialized nations and too much of the poorest. The interventions by the international labor standards body should not hurt the poor workers they are supposed to protect. In countries like Mexico, China and Malaysia to mention but a few where export processing zones are run by multinationals, there have been myriad labor standards violations (Neeman, 1999). These multinationals have gone out of their ways to ensure that their workers are not members of trade unions that can facilitate collective bargaining. Countries where such EPZs are established have also ensured that there are no minimum wage laws. Those willing to work in such zones have to relinquish some of the rights that some workers in different parts of the country enjoy. In such circumstances, International labor standards can only be applied on three general principles thus irrationality, the large numbers principle and the multiple equilibrium principle.

Within the context of the export processing zones, the global labor standards should be applied in circumstances when workers are deemed irrational. Human beings can be irrational. Because they are impatient, they are bound to make disproportionate sacrifices to make good things happen soon. Besides, they lack self-control. Villagers can at times take loans at 10% interest rates per month because they may not understand what 10% per month means in terms of enormity of repayment burden. Global labor standards should therefore be used to protect workers against systematic and established human irrationalities.

In poor nations where child labor flourishes the labor markets may have multiple equilibria characterized with low wages for children working in one equilibria and high wages and no child labor in equilibria. In low wage equilibria where child labor is employed, there is a possibility that a Pareto improvement may be achieved. However, when child labor is burnt the entire economy may be deflected towards another equilibrium that may not be inferior to the first equilibrium (Basu, 2003). The global labor standards should therefore not ban child labor whenever it is deemed to be happening but ensure that conditions for banning child labor are compatible with adherence to the Pareto principle.

It is a fact that certain contracts, unanimously accepted by both sides, can lead to Pareto improvement. Nevertheless, if the contracts were to be allowed and used by the masses, there would be significant changes in market parameters that would leave some people worse off. Global labor standards should use the large numbers principle to justify banning of certain kinds of contracts like unjust labor practices.