Global Big Business Is the Most Powerful Force for Improving Labor Standards in Developing Countries. Discuss.

Topics: International Labour Organization, Developing country, International labour standards Pages: 14 (4593 words) Published: September 2, 2008
Global big business is the most powerful force for improving labor standards in developing countries. Discuss.

In their insatiable hunt for increased profits, large corporations have developed an increasingly global presence. This presence exists to facilitate both the import and export of goods and reflects the fact that for many companies, potential customers are no longer restricted to the domestic market. Advancements in communications and logistics have rendered geographical distance between markets a relatively straightforward problem to overcome. This is demonstrated all over the world by the automobile industry. It is these advancements that have enabled big businesses, particularly those who manufacture tangible goods such as apparel and electronics, to shift certain operations to countries where labour costs less.

Although there is evidence to suggest that average productivity of workers in the global manufacturing industry increases with the cost of labour, (Rodrik, 1997) it is a reality that low-skilled workers in a developing country can produce identical products to low skilled workers in high-income countries at a fraction of the cost, even after transportation costs have been accounted for. However, intense international debate surrounds the use of ‘cheap’ labour forces in developing countries, as currently no extensive fixed international labour laws exist to ensure workers benefit from similar protection of rights that workers in developed countries do. Critics claim that this leaves workers in developing countries vulnerable to exploitation by the ‘manic logic of capitalism’ (Hu-Dehart, 2002), a logic that suggests that profits exceed human rights in importance. Potentially this situation exists because, as George Ross considers, ‘capital has expanded internationally, whereas labour standards have not. This causes the problem’ (2000). If this is true, it suggests that big businesses are either satisfied with domestic labour laws in the developing countries in which they operate, or that they are more concerned with generating profits than with how ethically those profits are made. The prioritizing of profit over people would lead to a situation where ensuring humane working standards was of secondary importance to ensuring that the labour produced more profitable results than competing companies to maintain competitive advantage. It would coincide with Richard B. Bilder’s opinion that TNCs ‘do a great deal to foster economic integration, but relatively little to offset the negative effects of integration of workers’ (2006). If forced implementation of labour standards was predicted to diminish a company’s profits, either the standards would have to fall or the company may look to another country for its outsourcing requirements. Daniel W. Drezner suggests that this problem exerts intense pressure on developing countries and causes ‘a Darwinian struggle for capital where all other values, including workers’ rights, are sacrificed upon the altar of global commerce’ (Drezner, 2000). Unfortunately, there are examples of this observation being true.

In 1998 the International Labour Organization, (ILO) set out core ‘basic rights that workers are entitled to everywhere as fundamental, inalienable and indivisible human rights’ (Dearden, 2003). These are: •Freedom of association and the right to collective bargaining.

The elimination of all forms of forced or compulsory labour.

The abolition of the most hazardous forms of child labour.

The elimination of discrimination in respect of employment and occupation.

However, these basic ‘rights’ as endorsed by the 175 members of the ILO, including China and India, are not at all legally binding and are so rudimentary that they do not protect workers from exposure to dangerous or inhumane working conditions. It can be assumed, therefore, that either countries’ own national laws are trusted by transnational corporations (TNCs) to sufficiently...
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