1. Global Commodity Chains and Labor 1

2. Outline 2  Economic integration of “Greater China” (China-Hong Kong-Taiwan) and China in East Asia  Concept of “global commodity chains”  Experience of labor in low-wage manufacturing  Actors affecting labor rights

3. Economic Integration of “Greater China”: A Player in Global Production Chains 3  How did China become a player?  enabled by political initiatives  driven by economic complementarities Geographic proximity Exchange rates 1980s appreciation of New Taiwan Dollar Stricter environmental regulations in democratizing Taiwan Ex: electro-plating  arsenic in ground water Land values increase in Taiwan in 1980s Upward pressure on wages in Taiwan in 1980s  facilitated by linguistic and cultural affinities  Question: Where were the first special economic zones located? Why?

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5. Economic Integration of “Greater China”: A Player in Global Production Chains 5  Chinese government policies to attract foreign direct investment in export-processing zones strategically located near Hong Kong and Taiwan  “Special economic zones”  Tax breaks for exporters  Duty-free import of inputs  Infrastructure development

6. 6 Origin of Direct Foreign Investment Cumulative 1990-2004

7. Two Types of Global Commodity Chains 7  Distinguish  Producer-driven commodity chains Capital, technology intensive Exs: automobiles (GM, Toyota), aircraft (Boeing, Airbus), electrical equipment Core multinational corporations invest directly

8. Two Types of Global Commodity Chains 8  Distinguish  Buyer-driven commodity chains Labor intensive, low technology Exs: apparel (Gap, Levi), shoes (Geoxx), toys (Brio, Disney) Core corporations own trademarks, engage in sub- contracting “Just-in-time” inventory control Very short production lead-times  Low barriers to entry in manufacturing  High barriers to entry in design and marketing

9. Global Commodity Chain Analysis: Roots in Dependency and World Systems Theory 9 Dependency World Systems Core Periphery Semi-periphery Periphery  Global commodity chain studies draw on the insights of dependency/world systems theory

10. Global Commodity Chains 10  What functions take place in the  Core?  Semi-periphery?  Periphery?

11. 11 Where is power located in the buyer-driven commodity chains? location functiondivision of profits core design/marketing$$$$$$  orders, contracts ex’s: Reebok, Nike semi-peripheryhigher-end mfg’ing $$$ trade intermediary for low-end mfg’ing quality control, financing, shipping (middle-man role)  direct foreign investment ex: Yue Yuen periphery low-end mfg’ing $ (paid by middle-man) ex: Lili (working sister 打工妹） Dongguan 2007 wages now ~$3/day

12. Links in the chain Contracts (product orders) from “buyers” in core (US, Eur) Direct foreign investment from semi- periphery (Hong Kong, Taiwan) Labor & assembled products from periphery (China, SE Asia, Latin America) 12

13. Sample industry breakdown 13  75 billion dollar industry 36 billion  brands/stores48% 25 billion  transportation logistics 33% 14 billion  factory oversees 19%

14. “Sweatshop Labor” 14  Objective and subjective interpretations  Video http://video.google.com/videosearch?hl=en&q=labor%20c hina&um=1&ie=UTF-8&sa=N&tab=wv# 5:20-10:33; 20:11-24:00  Why might “sweatshop labor” seem desirable to workers?

15. Questions to reflect upon 15  Identify several pro’s and con’s associated with “sweatshop labor.”  Is low-wage labor in export processing industries  “a route out of poverty”? or  “a race to the bottom”?

16. Is low-wage labor in export-processing factories a…  “route out of poverty”?  Higher paying job oppor- tunities for rural surplus labor  Labor remittances important source of capital “China Blue” & “Working Sister” Open small business Help pay for sibling education Dowry—more independence in choice of marriage partner 16

17. Is low-wage labor in export-processing factories a… 17  “Race to the bottom?”  Low or unpaid wages  Wages for unskilled workers rising very slowly (in part due to intense competition both locally and internationally), while wages for skilled workers rising dramatically (note: not a level playing field in terms of access to education for children in remote, rural areas)  Abusive working conditions

18. New Developments in Labor Politics: Strikes Hit Honda Parts Factories

19. Discussion Questions  Pun Ngai  What has improved as a result of corporate codes?  What has not improved as a result of corporate codes?  Try to identify and list all the of institutions/actors affecting labor conditions, as cited by Ngai.  Which institution/actor(s) has the biggest effect on labor conditions?  Friedman and Lee  What would Friedman and Lee add in terms of institutions/actors affecting labor conditions?  Other questions

20. Discussion Questions  Pun Ngai  What has improved as a result of corporate codes? Upgraded factory, dormitory facilities Contracts 1 day off in 7 No labor deposit No holding of id’s  What has not improved as a result of corporate codes? Mandatory overtime Below minimum wage Free trade unions

21. Discussion Questions  Pun Ngai  Try to identify and list all the of institutions/actors affecting labor conditions, as cited by Ngai. SA 8000 non-governmental, multi-stakeholder organization whose mission is to advance the human rights of workers around the world auditable social certification standards for decent workplaces, based on conventions of the ILO, UN and national laws “works with brands to focus their corporate social responsibility programs on management control of working conditions” Western (European) transnational corporation Western audit firm Clean Clothes Campaign (Europe)/Worker Rights Consortium (US) Foreign investors Taiwanese co-owner of China Miracle Hong Kong owner of China Galaxy Chinese private investor Co-owner of China Miracle Chinese factories China Miracle Garments China Galaxy Apparel Chinese Government (Labor Laws) (local labor bureau tasked with enforcement; who is labor bureau subordinate to?) Garment industry Federation Trade Union Factory trade union branches

22. Discussion Questions  What institutions/actors would Friedman and Lee add?  Powerful, fiscally interested local governments  Hukou (household registration system)  Legal system (arbitration--committees, litigation—courts)  New social media  Labor NGOs