The Global Division of Labour and the Division in Global Labour 2011 Timothy James Kerswell (BSSc. (Hons)) Queensland University of Technology: School of Humanities and Human Services Doctor of Philosophy (IF49): Thesis 1 Contents List of Tables, Charts and Illustrations ............................................................ 3 Abstract ........................................................................................................... 4 Key Words ....................................................................................................... 5 Statement of Original Authorship ..................................................................... 5 Acknowledgements ......................................................................................... 6 Chapter 1 – Introduction .................................................................................. 7 Chapter 2 – Economic Differences between Workers ................................... 28 Chapter 3 – Developing a Framework to Explain Differences between Wages ...................................................................................................................... 66 Chapter 4 – The Politics of Global Labour: Production, Consumption and Class ........................................................................................................... 123 Chapter 5 – Case Studies: Comparison of Commodity Chains ................... 184 Chapter 6 – Understanding National and Global Institutions ....................... 208 Chapter 7 – International Labour Institutions: The Legacy of the 20th Century .................................................................................................................... 229 Chapter 8 – The Emergence of Alternatives to 20th Century Institutions ..... 296 Chapter 9 – Conclusion ............................................................................... 325 Bibliography ................................................................................................. 334 2 List of Tables, Charts and Illustrations Table 1: Data Reporting Comparisons UNIDO And ILO (US$) p42 Chart 1: Average Automobile Wages (Us$) p43 Chart 2: Average Automobile Wages (Ppp$) p44 Table 2: Country Ranking - Productivity (Automobiles) p46 Chart 3: Wages And Productivity (Automobiles) p46 Chart 4: Average Garment Wages (Us$) p48 Chart 5: Average Textile Wages (Us$) p49 Chart 6: Average Garment Wages (Ppp$) p50 Chart 7: Average Textile Wages (Ppp$) p51 Table 3: Country Rankings - Productivity (Garments) p52 Chart 8: Wages And Productivity (Garments) p53 Table 4: Country Rankings - Productivity (Textiles) p53 Chart 9: Wages And Productivity (Textiles) p54 Table 5: Average Weekly Work Hours p55 Chart 10: Average Weekly Work Hours And Wages - Automobiles p56 Chart 11: Average Weekly Work Hours And Wages - Textiles p57 Chart 12: Average Weekly Work Hours And Wages - Garments p57 Chart 13: Average Weekly Work Hours And Productivity - Automobiles p58 Chart 14: Average Weekly Work Hours And Productivity - Textiles p58 Chart 15: Average Weekly Work Hours And Productivity - Garments p59 Table 6: Relative Productivity Including China p62 Table 7: Average Hourly Labor Compensation In Manufacturing (2009) P63 Figure 1: Distribution Of Value Between Spheres p148 Figure 2: Hypothetical Distribution Of Value Between Spheres If No Capitalist Sphere p149 Table 8: Types Of Labour And Source Of Value Compensating Labour Power p150 Figure 3: Sources Of Social Services Income In A Consumption Economy p157 Figure 4: Social Services Income In A Production Economy p158 Figure 5: Automobile Commodity Chains p194 Table 9: Comparison Between Lead Firm And Supplying Firm Size p200 Table 10: Comparison Of Lead Firm Organizational Characteristics p201 Table 11: Comparison Of Host Country Features In The Supplying Firm p202 Figure 6: Distribution Of Value In Commodity Chains p204 Table 12: How The ILO Calculates Number Of Delegates Per Organization p263 Table 13: Key Labour Market Characteristics And ITUC Representation p273 Table 14: Corporations And Unions Who Have Signed International Framework p288- Agreements 289 3 Abstract Since the 1980s the locus of manufacturing and some services have moved to countries of the Global South. Liberalization of trade and investment has added two billion people to world labour supply and brought workers everywhere into intense competition with each other. Under orthodox neoliberal and neoclassical approaches free trade and open investment should benefit all countries and lead to convergence. However considerable differences in wages and working hours exist between workers of the Global North and those of the Global South. The organising question for the thesis is why workers in different countries but the same industries get different wages. Empirical evidence reviewed in the thesis shows that productivity does not explain these wage differences and that workers in some parts of the South are more productive than workers in the North. Part of the thesis examines the usefulness of explanations drawn from Marxist, institutionalist and global commodity chain approaches. There is a long established argument in Marxist and neo-Marxist writings that differences between North and South result from imperialism and the exercise of power. This is the starting point to review ways of understanding divisions between workers as the outcome of a global class structure. In turn, a fault line is postulated between productive and unproductive labour that largely replicates the division between the Global North and the Global South. Workers and their organizations need shared actions if they are to resist global competition and wage disparities. Solidarity has been the clarion of progressive movements from the Internationals of the early C19th through to the current Global Unions and International Confederation of Trade Unions (ICTU). The thesis examines how nationalism and particular interests have undermined solidarity and reviews the major implications for current efforts to establish and advance a global labour position. 4 Key agents discussed are the more established agencies of the ICTU and International Labour Organization and the provisional groupings built around social movement unionism and the World Social Forum. Key Words Labour, Political Economy, Global South, Third World, Globalization, Marxism, Unequal Exchange, Global Commodity Chains. Statement of Original Authorship The work contained in this thesis has not been previously submitted to meet requirements for an award at this or any other higher education institution. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made. Signature Date 17 March 2011 5 Acknowledgements To those many people who have inspired and supported me whether in the undertaking of this project or long before it began, I express my sincerest gratitude. For their unique and instrumental role in support of me, I feel particularly fortunate to thank and to highlight some people without whose unique and instrumental contributions I feel I could not have even attempted this project. Firstly, I would like to thank my parents, Barbara and Dennis, for the sacrifices they have made for me and for always encouraging and motivating me to fulfil my potential in each and every thing I do. Secondly, I would like to thank my wife Prerna, for being the custodian of my sanity, for her understanding and friendship, and for her steadfast belief in me. Last but not least, I would like to thank my supervisor and mentor, Howard Guille, for encouraging and nurturing me as a scholar. In difficult circumstances, I feel he has far surpassed what is expected of a supervisor. To me, he will always remain a role model and an ideal example of what it means to be an educator. 6 Chapter 1 – Introduction The liberalization of trade and investment over the last two to three decades has effectively added two billion people to the world labour supply principally in China, Russia, Eastern Europe, Brazil and Argentina. Simultaneously countries in the Global South have become the main source of a range of manufactures especially automobiles and automobile parts, clothing and textiles, footwear, toys and domestic whitegoods. The sheer scale of these changes is bringing workers in different countries into more intense competition with each other. As noted by Freeman, while the global labour supply has doubled1, the new entries to the global labour market brought a relatively small amount of capital to the global supply2. This has led to an increase in the ratio between the supply of labour and the supply of capital leading to intense competition3. This is occurring in both manufacturing and services and while the notion of a global ‘race to the bottom’ may be over- simplified, there is little doubt that global employers and investors are able to play off national workforces and national labour unions against each other. As noted by the United Nations Industrial Development Organization: “Between 1975 and 2000, rich countries were losing their global share of employment in manufacturing; 24 of the 28 manufacturing sectors in the OECD countries registered sharp declines in their global share of employment. Fast-growing middle-income countries also lost significant employment shares in such mass manufacturing industries as textiles, 1 Freeman, Richard. (2006). The Great Doubling: The Challenge of the Global Labor Market. Available