Impact of Globalization on Labour

Globalization and Labor

Globalization is a term used in a multiplicity of senses, such as the global interdependence of nations, the growth of a world system, accumulation on a world scale, and the global village (Petras Pp). All of these concepts, as well as many others, are rooted in the general notion that the "accumulation of capital, trade and investment is no longer confined to a nation-state" (Petras Pp). Globalization in the most general sense refers to the "cross-national flows of goods, investment, production and technology," and for advocates, the scope and depth of these flows have created a new world order, "with its own institutions and configurations of power that have replace the structures of nation-states" (Petras Pp). Globalization has deepened and extended the international division of labor, with everything from automobile parts to information collection and analysis now out-sourced to labor in distant nation-states (Petras Pp). Exporting labor to the Third World nations for the purpose of retaining a mass of low paid workers is increasingly advancing, and is merely a continuation of previous international division of labor between mining and agricultural workers in the Third World and manufacturing and service workers in the imperial countries (Petras Pp).

In "Globalization: A Critical Analysis" James Petras argues that social conditions at the dawn of the twenty-first century are reverting to the nineteenth century (Petras Pp). Health care now more precarious and more dependent on income levels, has left more than sixty million Americans with either inadequate health care or none at all, and over ten million children with no health coverage (Petras Pp). Job insecurity has increased as more companies resort to subcontract part-time and temporary work, forcing families to work at below subsistence minimum wage, and more hours than they did thirty years ago (Petras Pp). Moreover, retirement age is reaching nearly seventy years old, employers no longer provide pension plans, and the use of prison-labor by private employers is increasing (Petras Pp). Adding to this the fact that the number of children in orphanages growing, as well as the number of children living in poverty, "inequalities approach or surpass" nineteenth century levels, says Petras (Petras Pp). In both Europe and North America, the future for most of the younger generation looks insecure and fearful, making this the first generation since World War II that will be "down-wardly mobile," promising a prolonged work life under declining wages with no job security or social assistance (Petras Pp).

Politically the big push toward globalization was a result of a dramatic change in political power away from leftist, populist and nationalist regimes toward globalist governments (Petras Pp). In social term, the push resulted from the "defeat and retreat of trade unions, the declining influence of the working class, lower middle class and peasantry" (Petras Pp). The ascendancy of the social classes engaged in the international networks of CGT, particularly the financial sector, "set the stage for the gobalist counter-revolution (Petras Pp).

What began in certain Third World countries, such as Chile and Mexico, and imperial centers, such as the United States and England, spread throughout the world in an uneven fashion, leaving the greatest social crisis in precisely the countries that have advanced furthest in globalization (Petras Pp). The United States, followed by England, has the greatest number of workers without medical coverage, non-unionized workers, temporary or part-time labor force with no or minimum social benefits such as vacations and pensions (Petras Pp). The much vaunted low unemployment rate of the United States in contrast to Europe is counter-balanced by the highest rate of low wage, vulnerable workers, "conditions unacceptable to the European labor movements" (Petras Pp). A similar process is occurring in the Third World, with unemployment rates pushing twenty percent in Argentina and Brazil, rates that multiplied with the globalization of their economies (Petras Pp). Similar processes are occurring in Eastern Europe where living standards have fallen between thirty and eighty percent since the transition to capitalism began in the late 1980's (Petras Pp). Mexico, the model Third World country, has seen wage earning income levels plummet to thirty percent of their levels fifteen years ago (Petras Pp).

The structural power of the globalist classes is the cause and consequence of the structural adjustment policies, SAP, which have been informally and formally implemented (Petras Pp). In reality, SAP is a process of "income reconcentration" through cuts in social spending, corporate tax reductions and increased subsidies (Petras Pp).

The concentration of power in the hands of employers at the expense of wage workers (dubbed "flexibilization of labor")

leads to rigidities in the hierarchy of the corporate organization. The employers unilaterally fix terms for hiring, firing, out-sourcing, subcontracting and other forms of increasing the rate of exploitation, lowering labor costs and increasing profits for more global ventures (Petras Pp).

The advance of SAP is directly related to the resistance of labor and the resistance of labor is tied to the internal structure of the unions, the ideology of the union leaders and the accessibility and rotation of leaders (Petras Pp).

Where there are democratic structures within the unions, when the leaders confront organized opposition, where the leaders are imbued with anti-capitalist ideology or at least see the union as a movement rather than a business and where leaders are challenged or replaced by legitimate rank and file alternative leaders, the unions have been more successful in blocking

the implementation of SAP and the full globalist agenda (Petras Pp).

This is the case in France, Italy and Germany, however, in the United States union leaders run oligarchical organizations, in which millionaire union officials run the union (Petras Pp). The provinces in Argentina have been in the forefront of opposition, while Buenos Aires lags behind, and in Brazil the landless workers are far more combatative than the urban slum dwellers or the trade unions (Petras Pp). In Venezuela, the urban poor of Caracas have been more active than the official trade unions, and in general, public sector workers have been more active than private sector, in countries such as Chile, Argentina, Brazil and Mexico (Petras Pp). Generally, the center of the more radical struggle has been the rural areas and provinces, while the urban industrial sectors are basically engaged in the defensive phase, however these are not hard and fast distinctions (Petras Pp). In Europe and Asia, the workers who have spearheaded the struggle have been from the most advanced sectors, such as transport in France and metal workers in South Korea (Petras Pp).

The spread of opposition and its growing depth outside of the electoral arenas has created a firm base for a systemic alternative, and apart from electoral politics, the social base of globalist politicians and economic elites has become increasingly fragile (Petras Pp). The ideological and institutional center of globalism is the United States:

it is here that it stands unchallenged because of the long-standing oligarchical nature of the trade unions (which sets them apart from most workers) and the co-opted leadership of the major ethnic, gender and conservationist groups who function as mere pressure groups on the dominant globalist parties (Petras Pp).

Yet as one moves away from the United States the picture changes dramatically, especially in Europe and in Latin America and Asia (Petras Pp). A similar process occurs in examining the dynamic of the internal politics of the countries, a superficial view that looks only at the electoral process gives the impression of the solidity of globalist perspectives (Petras Pp).

According to the World Bank, globalization can be measured in terms of growth in volume of cross-border economic activities, yet it is also the widening and deepening of trade and capital flows under liberalized market policies (Williamson Pp). Globalization has benefited developed countries through faster economic growth, new technologies and improved social and labor conditions, while developing countries have not realized such gains (Williamson Pp). And as many of these countries reform their economies, most are faced with new constraints imposed by developed countries and express disdain for globalization (Williamson Pp). Another view sees globalization as an economic process causing nation-states to hand over control of distribution and allocation to the market (Williamson Pp). Global economist Charles Kindleberger stated in 1969, "The nation state is just about through as an economic unit... it's too easy to get about. Two-hundred-thousand-ton tankers - airbuses and the like will not permit sovereign independence of the nation state" (Williamson Pp). Poverty is viewed as low monetary income, low consumption and low human development, accompanied by "vulnerability, voicelessness and powerlessness" (Williamson Pp). Although the debate is inconclusive as to whether the poor benefit from economic growth, the World Bank claims that "globalization is pro-poor,"

There are approximately 200,000 laborers, mostly women, who work in Malaysia's big electronics plants, a production workforce about the size of Silicon Valley, whose bosses are all foreign high-tech giants (Bacon Pp). Chips and circuit boards assembled online in Penang are shipped to the rich countries with the markets, such as the United States, Japan and Western Europe (Bacon Pp).

Just as their counterparts on the line in Sunnyvale, California, Malaysian electronics workers have a difficult time organizing unions, in fact there are zero unions in both places (Bacon Pp). G. Rajasekaran, secretary general of the Malaysian Trades Union Congress, says although the law says they can unionize, in practice they cannot, "The governments of Asia seem to have been convinced by employers that workers shouldn't have the right to organize and bargain. And U.S. companies are among those most guilty of violating our rights" (Bacon Pp).

Putting the WTO in charge of enforcing labor standards is supported by some unions in the developing world, but opposed by others. Explains Rajasekaran, "Some of our colleagues fear linking trade to labor standards, that they will be used as a tool for protectionism, India, for example, has lots of child labor, and fears sanctions will be applied because of it" (Bacon Pp). Zwelinzima Vavi, general secretary of the Congress of South African Trade Unions, recognizes that "there is a controversy in the developing South about labor standards. Workers are worried about the loss of jobs, and suspect these proposals are a disguise for protectionism by unions in developed countries" (Bacon Pp). Nair Goulart of Forza Sindical, a Brazilian labor organization reports that after twenty-five years of liberalization, "the difference between rich and poor is wider than ever," with unemployment at roughly ten percent and workers buying power at near thirty percent of what it was in the 1980's (Bacon Pp). Says Goulart, "The UN Development Program says the goal of investment and trade liberalization is to improve the quality of life. Yet we are competing to sell our natural resources and our workforce for the lowest possible price" (Bacon Pp).

Moreover, the gap between rich and poor countries is widening. In the 1950's the difference in standard of living between the United States and Mexico was 3:1, today, according to Mexican economist Alejandro Alvarez Bejar, the difference is 16:1, a difference that impoverishes Mexican workers and is the cause of the loss of American jobs as corporations relocate production (Bacon Pp).

During the 1990's, the rate of unionization fell by more than twenty percent in thirty-five of the sixty-six countries, for which comparable data was available, with the sharpest declines seen in Argentina, Australia, Costa Rica, France, Israel, Mexico, New Zealand, Portugal, the United States, and Venezuela, as well as the former Eastern bloc countries (Newland Pp). Only Hong Kong (prior to the resumption of Chinese control in 1997) and the Philippines have seen union membership increase significantly (Newland Pp). In Indonesia, repressive actions designed to curb labor unrest and the possible development of a non-state sanctioned labor movement continues, with the response of the government being to adopt a "carrot and stick" strategy which maintains strict control over such labor rights as freedom to organize, yet allows for periodic increases in the state-defined minimum wage (Hadiz Pp).

Empirical evidence shows that critics of globalization are wrong about the effects of global capitalism on inequality, both within and among countries (Vasquez Pp). A recent World Bank study compared the performance of globalizing and nonglobalizing developing countries and found that globalizing countries had higher growth rates (approximately 5% in the 1990s) than other countries, rich or poor (Vasquez Pp). According to a study by the National Bureau of Economic Research, it takes two days, two bureaucratic procedures, and $280 to open a business in Canada, an entrepreneur in Bolivia must wait eighty-two business days, go through twenty procedures, and pay $2,696 in fees, while in Hungary, the same operation takes fifty-three business days, ten procedures, and $3,647 (Vasquez Pp). Such costly barriers favor big firms at the expense of small enterprises, where most jobs are created, and push a large proportion of the developing world's population into the informal economy (Vasquez Pp).