Work and Inequality in the Global Economy: China, Mexico, and the United States
Why focus on work and inequality at a time when other crises and conflicts dominate the headlines? We posed this question as we convened a recent conference bringing together labor researchers and practitioners from China, Mexico, and the United States.1 After all, Mexico is being torn apart by a disastrous war on drugs. China’s economic development, trade, and currency policies engender international controversy. The paramount issue in the United States since the economic collapse of 2008 is the Great Recession. In the shadow of these multiple crises, each of the authors in this special section makes her or his own case for why inequality in the world of work is, indeed, critically important.
A closer look at the headline issues in China, Mexico, and the United States reveals that, in fact, work-based inequality is a driver behind many of the other crises claiming public attention. China’s export orientation is driven by the need to create jobs for a huge underemployed rural population. This model depends, in part, upon lower wages, thus constraining China’s ability to expand a much-needed middle class of consumers. Similarly, Mexico’s drug war recruits soldiers on both sides because of the severe shortfall in job creation and inequality in opportunity, leaving informal—and even illegal—employment as the main alternative for many. The world economic crisis originated in the United States due to the disappearance of middle-class jobs and the resulting dependence on speculation and financialization to keep our economy afloat. So undercompensated work and inequality are a major part of the problem, and their remedies will be a major part of the solution In addition, we can no longer talk about any country in isolation. China, Mexico, and the U.S.A. are connected by so many links of trade, competition, capital flows, and flows of people that the only way to start taking apart these problems is to look at them, and work on them, together.
The following four articles call our attention to global labor inequalities, both across borders and within them. Ian Robinson’s examination of China-Mexico competition emphasizes cross-border differences in pay and working conditions; Anita Chan analyzes China’s labor standards and labor movement in the global context; Graciela Bensusán and Chris Tilly compare differing labor standards within Mexico’s export-assembly sector (spotlighting within-country inequalities and their connection to the operation of transnational corporations and global labor); and Jeffrey S. Rothstein diagnoses the North American auto industry.
International labor inequalities have sparked fears of a global “race to the bottom” in wages and working conditions. But these articles demonstrate that the reality is more complicated than simple unbridled labor-cost competition. Robinson points out that labor costs are a small percentage of final-product prices, and that China’s besting of Mexico is based at least as much on “high-road” technology and public investment in infrastructure as on low labor costs. Bensusán and Tilly argue that when skills are important and labor costs a small percentage of total costs, companies may find it profitable to treat workers well.
Labor unions, of course, are crucial to the improved treatment of workers. Each of the articles in this cluster highlights the varied roles played by unions in these three countries. Bensusán and Tilly depict Mexican labor organizations ranging from company unions that negotiate behind workers’ backs, to militant grassroots insurgencies. Rothstein shows how differing labor-management histories—at General Motors plants making the same product—can result in distinct production processes. Chan focuses on the strategic choices facing the All-China Federation of Trade Unions (ACFTU), which has taken some important steps toward representing the interests of Chinese workers, but also some steps back. The evidence presented in these articles indicates that the balance of power on the ground—between labor, management, and the state—as well as international solidarity, can prove decisive.
The options before China, Mexico, and the United States today are stark. One is continued growth of inequality—with the accompanying economic and social exclusion of large parts of the population—leading to instability, erosion of democracy, and the risk of a social explosion. The other is—through the efforts of unions, NGOs, and progressive forces within government—a concerted attack on inequality within and across borders. The authors in this cluster explore key challenges and opportunities for steering our world in that second direction. We hope the readers of New Labor Forum find their contributions useful in thinking through these questions.
1. The October 8-10, 2009 “Work and Inequality in the Global Economy: China, Mexico, and the United States” conference took place on the campus of UCLA. It was sponsored by the UCLA Institute for Research on Labor and Employment (including its Center for Labor Research and Education unit) and a variety of additional co-sponsors, including the City University of New York’s Murphy Institute for Worker Education and Labor Studies. For more information, see http://irle.ucla. edu/workandinequality2009.htm.
New Labor Forum 19(3): 49-50, Fall 2010
Copyright © Joseph S. Murphy Institute, CUNY
ISSN: 1095-7960/10 print, DOI: 10.4179/NLF.193.0000008