Week 2: Global supply chains and labour exploitation

Ongoing changes to the global economy have left hundreds of millions of workers in vulnerable and precarious conditions. Hard won protections regarding pay and conditions have been eroded via deregulation and outsourcing. Oversight and inspection of workplaces have declined. Rates of union membership have collapsed in many places. Additional barriers to collective organising and collective bargaining have been established. Workers are also increasingly mobile, with an estimated 164 million international migrant workers throughout the globe. Most of these workers do not have the same rights and protections as their local counterparts, leaving them vulnerable to numerous forms of abuse. Both national and international regulations have not kept up.

We sometimes speak about the global economy as if it were a force of nature, or as a patient with uncertain health. It can be tamed or unleashed, wounded or healed. The specific language used can reveal a great deal about how people think about economic processes and government policies. As any economist can tell you, the main bone of contention is often the role of regulation. Why and when is regulation required, and what form should it ideally take? Over the last three decades, this enduring debate has taken on new features, since so much of what now gets consumed comes from factories and workers in other countries. Instead of making goods in-house, corporations now subcontract many aspects of their production processes to partners in developing countries with lower wages, less regulation, and fewer protections for workers.

There is no question that global supply chains are good for corporations, but do they work for workers? As you might expect, this question can be answered in many ways, with different responses covering the full spectrum of yes, no, maybe, and sometimes. In a world where jobs are scarce there will always be claims that nearly any job is better than no job at all. Yet this begs an obvious question regarding the types of jobs that have been created. Major corporations use their market power to drive down costs by securing favourable contracts with suppliers, since their suppliers frequently have limited scope to negotiate better returns, better conditions, or less demanding production cycles. This combination of low prices and high expectations means that companies further down the supply chain frequently experience sustained pressure to depress pay and conditions, to the point where forced labour can appear as an unavoidable business strategy, while precarious labour remains a normal and unremarkable standard operating procedure.