Global Commodity Chains and Labor Rights - Essay Example

? No Sweat? Global Commodity Chains and Labor Rights Introduction Over the past few decades, a basic international manufacturing restructuring has been developed. This transformation is generally referred as the new globalize division of labor. The exporting activities of the developed countries have been changed significantly. Previously the developing countries were exporting only the raw materials and primary goods. Now-a-days, these countries are also exporting intermediate inputs and manufactured goods. The development of the manufacturing exports from several developing countries unleashed various new competitive pressures. According to the recent evident, almost 25 percent of total population of the developing countries are engaged in the paid labor live in several households (Seidman, 2007). These people generally survive on equivalent to 1 US dollar per day, per person. Day-by-day, the estimation of the poor working population is increasing significantly. This essay will take a close look at various debates global commodity chains and labor rights. Discussion Labor standard is the estimated, computed and several values, such as operations per hour, assembly time, and output per unit implemented in the evaluating or forecasting labor performance. The relationship between the system of labor standard and globalized production is effectively understood within the global commodity chain concept. The global commodity chain is referred to the way in which manufacturing, sales and distribution of goods is controlled and organized across the national borders. The labor intensive manufacturing of several consumer goods is generally characterized by the particular buyer-driven commodity chains. In these commodity chains the brand-name corporations and large retailers develop a decentralize systems of manufacturing and distribution of such goods. However, the market power significantly differs among the various players across the chain. The real production is generally subcontracted out to several small organizations that generally usually face intense market competitive conditions. Therefore, the subcontractors cannot comfortably raise the output price without risking business loss. On the other hand, brand name multinationals and retailers enjoy some significant market power degree that they can adopt to keep low prices for the products they buy or earn rents through the monopolistic brand identity development. The large retailers and brand-name manufacturers could implement their market power to improve labor standards at the production level by compensating the subcontractors to increase the cost. There are several limitations of the global labor standards. In spite of the implementation strategy, the limitations of several schemes along with the aspects to promote global labor standards can be recognized explicitly. Only a subset of the workforce of the world could receive any benefit if the standards were aimed to the workers who manufacture goods for export. Labors generally produce non traded services and goods cannot directly affected by several interventions such as a social cause or a standardize code of conduct. In addition to this, adoption of the expansionary macroeconomic policy can referred to be an effective strategy to improve the well being of the labors. It will help to secure the egalitarian outcome comparing to the targeted labor standards’ enforcement. Labor standards are not the appropriate policies for the well being of the workers during the period of low global economic growth rate. The concept of global labor standard is irrelevant within the context of global economic downturn and global business expansion of several firms. The government of the developing countries needs to be cautioned before developing an expansionary macroeconomic policy. It is true that, macroeconomic policies can effectively contribute to the fair improvements in the work condition. But these cannot be sufficient to address the widespread corrosion of the potential employment opportunity that has been identified and reviewed around the world. Additional interventions are quite important to reverse the decline in social protection during the slow growth level of the informalization process. However, posing the issue as an effective choice between the significant changes in policy regime at macroeconomic level unduly affects the available options. These strategies are not mutually exclusive. A coordinated approach along with range of effective inventions can be considered as the most significant means of economic outcome improvement. In spite of several limitations of international labor standards, the interventions have that much potentiality to improve the working lives of several people. It is true that, in several developing countries the organizations generally overlook the abusive working conditions. Skilled labors demand effective workplace environment and security in workplace against their hard work. Distribution of wages cannot be similar to the both skilled and unskilled employees (Hepple, 2005). The wages are rising dramatically for the skilled workers. On the other hand, the wage growth rate is minimal for the unskilled employees. Several individuals, corporations and agencies are responsible for these sweatshop conditions. Multinational organizations, government, subcontractors and consumers are responsible for these conditions. Several multinational organizations are pressurizing their vendors and suppliers regarding price and distribution schedule. As a result, it is ultimately creating intense pressure and stresses for the workers (Bair, 2009). In addition to this, the workers are not achieving proper wages against their hard work from the suppliers and vendors. The workers are getting highly affected due to the developed international labor standards. It is the key responsibility of the policy developers to minimize the involvement of the subcontracting middle man. Several developing countries are demanding foreign direct investment to distribute appropriate wages to the workers who provide and distribute the products and raw material with sheer hard work. The concept of subcontracting middle man is ultimately affecting the economic environment of the countries. Several developing countries, such as India, China and Brazil are getting affected due to the subcontracting concept. The workers are getting deprived to achieve appropriate wages due to the involvement of middle man in the import and export activities. Governments of developing countries are also responsible for this sweatshop condition. It is known to all that, small business firms in most of the developing countries force their employees to work for long working hours. Despite the long working hour, the employers do not provide appropriate working wages to their employees. Economic downturn, high unemployment rate and poor government policy is forcing the people to accept these unethical and stressful working conditions (Hale and Wills, 2008). Governments of several developing countries are failing to develop effective policies to control the appropriate wage rate and price of several commodities. The organizations have to set high price for the products due to the involvement of the middle men in the business operation process. It is true that, the living wage cannot be similar in each and every country due to different economic growth level. It is the responsibility of the government to take care of the basic needs of poor workers by giving them the opportunity so that they can earn appropriate wage. For example, clothing can be made under proper humane conditions. In addition to this, the government should make sure that the clothing is affordable for the consumers. However, developing countries like China tried to overcome these social and economical issues through effective economic integration strategy. Chinese economy is considered as one of the emerging global economy due to the economic integration. This integration was enabled by several valuable political initiatives. This economic integration was driven by several effective economic complementarities, such as exchange rates, geographic proximity, high land value, upward pressure on workers’ wages, and strict environmental rules and regulation. This economic integration of China was facilitated by the cultural and linguistic affinities. This economic integration helped the country to control the wage rate of the workers. In addition to this, the country succeeded to reduce the level of unemployment rate through the economic integration. Several foreign and domestic small firms have to follow the newly developed labor policies by the Chinese government in order to avoid legal challenges and threats. China is considered as the leading exporting country of manufactured goods and raw materials. Moreover, several leading global organizations are trying to expand their business practices in the emerging Chinese market to avail skilled and sufficient employees at low cost. But, these organizations have to follow the developed labor policy and business guidelines. In addition to this, the consumers can purchase or consume products at reasonable price level due to the absence of the middle man. Therefore, Chinese government and several local organizations can provide low priced and quality products to the local and international consumers and clients. This economic integration of china created huge threat for several leading multinational organizations. Therefore, the leading multinational organizations are trying to enter in Chinese market to secure their market share and global customer base. Conclusion It is clear from the above discussion that the workers in several developing countries are not getting advantage from the global labor standards and commodity chain. Low workplace facility, involvement of middlemen and poor policy development is affecting the life of the workers as they are not getting justifies wages. It is highly essential for the governments of the developing countries to review their economic structure in case of in adequate wage distribution. It is true that, economic condition of each country cannot be same. Therefore, the government should try to reform the wage distribution and labor standard policy to improve the lifestyle of poor working people. References Bair, J. (2009). Frontiers of Commodity Chain Research. Stanford: Stanford University Press. Hale, A., and Wills, J. (2008). Threads of Labor. New Jersey: John Wiley & Sons. Hepple, B. (2005). Labor Laws and Global Trade. New York: Hart Publishing. Seidman, G. (2007). Beyond the Boycott. London: Russell Sage. Read More