Labour in Global Value Chains in Asia

Labour in Global Value Chains in Asia
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Participation as suppliers in Global Value Chains has provided many benefits to Asia such as increased employment in higher value activities, reduction in poverty and the heightened participation of women in these modern sectors. There are also weaknesses in these developments such as the continuation of sweatshop conditions in several sectors, among other concerns. The book Labour in Global Value Chains in Asia unpacks these different positives and negatives and identifies spaces for progressive action and policies in the current GVC-linked global work environment.

Edited by scholars Dev Nathan (Institute for Human Development in India and Visiting Research Fellow at Duke University), Meenu Tewari (University of North Carolina) and Sandip Sarkar (Institute for Human Development in India), many of the 21 chapters in this book are derived from field research carried out as part of the multi-year Capturing the Gains research project(2010–2013), which was co-directed by Stephanie Barrientos, Associate Director of the Brooks World Poverty Institute at The University of Manchester, and Gary Gereffi, Director of the Duke University Center on Globalization, Governance & Competitiveness (and an author of one of the chapters in the Labour in Global Value Chains in Asia book). In the below Q and A, Nathan summarizes key findings from the book.

1. WHAT ARE SOME OF THE KEY TAKEWAYS FROM THE BOOK?

The key takeaways are:

· The benefits to labor in Asian developing countries have improved, not remained stagnant. For example, we have seen minimum wage increases among garment suppliers (Bangladesh), more secure work (Sri Lanka) and higher wages in grape supply (India). Most importantly, there are higher wages and more secure employment conditions in China. In India, earnings in the IT industry are higher than for employees of comparable qualifications in other industries.

· Women through their employment in GVC-based production have been able to challenge traditionally restrictive gender norms. Women have emerged as independent income earners. Their employment and movement across public spaces in the course of their work has challenged traditional norms. For example, it was considered immoral in some places for women to walk alone, particularly at night, but this is now changing. Case in point is garment workers in Sri Lanka and women in IT and call centers in India.

· Labor in the supplier firms, often in networked partnerships, has been active in carrying out various forms of struggle to improve working conditions. This finding comes out in studies of garment workers in Bangladesh, automobile workers in India and electronics assemblers (Foxconn) in China.

2. HOW DO YOU THINK THIS WORK CONTRIBUTES TO THE KNOWLEDGE OF GVCs?

First, we are able to show how the governance structure of GVCs are linked through the knowledge requirments of the tasks outsourced to the capability and skill levels of workers and the quality of their employment. Gerry Rodgers, former Director of the International Labour Organization’s International Institute of Labour Studies in Geneva, pointed out that “this is a major contribution to knowledge of how GVCs work.”

At the same time, the struggles of workers in different segments, actions of respective governments and labor market conditions (for example, sectoral labor shortages in India’s IT industry) mean that GVCs are reformed and do not just remain static. Thus, the book also contributes to the analysis of GVCs by bringing in the role of labor in reforming GVCs.

3. CAN YOU OUTLINE THE PROS AND CONS TO ASIA’S PARTICIPATION AS SUPPLIERS IN GVCs? WHAT ARE THE UNDERLYING FACTORS THAT HAVE CONTRIBUTED TO THE POSITIVES AND WHAT POLICIES SHOULD BE IMPLEMENTED TO ADDRESS THE CONCERNS?

Participation in GVCs has:

· Enabled developing countries in Asia to enter into sectors of production without having to either produce all of a product (i.e. India started by producing parts of software services, not all of them), or having to establish a brand and market its products (i.e. could any Asian country have sold the hundreds of millions of dollars worth of garments, shoes, soft toys, etc. without being supplier firms to international brands and retailers?).

· Allowed developing countries to learn advanced production methods and acquire knowledge of production processes — knowledge that could be used not just for production for the domestic market, but could also be the basis of attempts to upgrade their participation in GVCs.

· Provided employment to many tens of millions in these production segments.

· Enabled tens of millions of women to enter into employment as independent income earners and challenge traditional, restrictive gender norms.

Contributing to the positives have been open trade policies, an abundant supply of labor of varying educational levels and entrepreneurs who have been able to spot and utilize opportunities in various segments of production. At the technology level, the development of ICTs (Information and Communication Technologies) has made the splintering of production possible. This has been facilitated by cheap transport.

On the negative side, there are still high levels of precarious and even forced labor as migrants or child labor in various GVC segments. In addition, shares of total value earned by supplier firms in GVC production are very low, whether it is in garments or electronics.

It will be a challenge for GVC suppliers and countries not to get stuck in low-level or even middle-level traps. At an international level, it is important to set up mechanisms that can enforce internationally accepted labor standards in GVCs.

4. WHAT ARE SOME NOTEWORTHY CASE STUDIES BY SECTOR THAT YOU HIGHLIGHT IN THE BOOK?

One particular case study that will stand out for readers is the Foxconn workers in China producing iPhones and their varied forms of resistance to very stressful production schedules. Also noteworthy is the garment workers in Sri Lanka and their change from being ‘disposable to empowered’; call center workers in India and their individual resistance struggles against new forms of scientific management in office work; and home-based women workers in garment production in India and their upgrading through community-buyer-government initiatives.

5. COULD YOU DESCRIBE SOME OF THE DIFFERENCES IN GVC PARTICIPATION ACROSS DIFFERENT ASIAN COUNTRIES?

In overall participation in GVCs, China stands out due to its high level in comparison to the relatively low, though, increasing in India. China’s participation in GVCs has had a macroeconomic effect, helping to absorb the transfer of surplus labor from agriculture and bring about an overall labor shortage. This is still underway in India and not of the same magnitude as in China.

In relatively small economies, such as Bangladesh or Sri Lanka, the GVC-linked sectors are critical in both employment and export earnings. As would be expected, a majority of Asian participation in GVCs is at the lower end of the value chain, whether in garments, electronics or IT software.

Labour in Global Value Chains in Asia is part of the Development Trajectories in Global Value Chains published by Cambridge University Press. Three additional titles are currently scheduled as part of the series.

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