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Lecture 4

Week 4 - January 27, 28 & 30 -- The Global "South"

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Labour Studies
John Barkans

LABR ST 2G03: GLOBALIZATION AND LABOUR – January 27, 28, 30, 2014 LECTURE – JAN 27 GLOBAL SUBCONTRACTING, TRANSNATIONAL PRODUCTION CHAINS AND LABOUR IN THE “SOUTH” - Klein – Nike Model of Development o Outsourcing – production /manufacturing o Marketing brand – product design, imagery, brand building o Brand takes care of imagery, outsourced contractors take care of production o Not a job-flying story as the company is right out of production processes  There are no insert brand name (i.e. Nike) jobs in production; everything in production is outsourced to contracting companies (not “Nike jobs” – work for the contracting company) - Fordist System of Production/Fordism o System of mass production and mass consumption o Mass production  Taylorism + assembly lines o Make a product, need someone to buy it  Excess in production leads to a loss (people can’t afford or didn’t need to buy more)  People need sufficient wages in order to consume the mass amounts of production - The Fordist Vertically Integrated Production System o Almost everything required to produce the product all takes place in one enclosed area o Ex. Ford River Rouge complex  Dearborn, Michigan (1920s)  93 different structures in one area  Employed 75 000 workers  Own machine shops  Made all components for the cars  Integrated steel mill with all of the needed machinery  Owned own forests, coal mines, built barges, railroads, hydro-electric facilities, etc. – all to bring in natural materials and to be able to make products o Less monopolistic industries (i.e. apparel) can be vertically integrated too o Had some supplier companies / subcontracting  Not all production pieces are together  Even the most Fordist production systems had supplies fed in • Suppliers close to production site • Tried to limit the necessity of relying on suppliers o Why so vertically integrated? 1. Reliability of Supply  Missing one piece/part, the whole system shuts down  Able to keep an eye of amounts and speed of product production as everything is close by  Stockpile parts just in case there is a shortage 2. Quality control  One piece not properly made, whole system shuts down  Easier to coordinate all those parts 3. Costs  Shipping costs were expensive  Having everything close by cuts down on those costs - Vertical Integration Design To Overcome: 1. Trade barriers  Tariffs were high (big expense if shipping to and from other countries) 2. Barriers of Space and Time  Took a long time to ship things across countries and world  Lack of coordination with makers of all the parts  Therefore any outsourcing/contracting out, it needed to be close by o Since 1970s-1980s  Trade Barriers Dismantled • Tariff dropped from 40% to 5% • Huge drop meant shipping cheaper • New free trade agreements  Technological Developments • Computer systems to track the complex production phases o Quality of control easier to track and integrate • Transportation and communication o Speed and costs for the better • Compressed space and time  Can now focus of a specific part of the company (i.e. marketing, customer service, brand building, etc.) and production can be dealt with elsewhere - Enabled Production Functions to be Decoupled o “spectacular integration of the global economy through trade while there has been a spectacular disintegration of the production process” LECTURE – JAN 28 GLOBAL “SOUTH”… continued o Creation of global production chains and a new international division of labour o Creation of.. o Creation of.. - Klein o At least 850 EPZs (Export Processing Zones) spread over 70 countries by the late 1990s o ILO says that by 2008, 3500 EPZs will be operating in 130 countries and employing 66 million workers o Participant observation of one EPZ (in Philippines)  Details characteristics • Who labour force is • Working conditions  Bad conditions, but there is always another place that is worse • Fearing capital flight, • Workers realize they are cheap labour but fear company moving to somewhere even cheaper  Quite accurate portrayal/events back it up • Ex. 2002-2006 there was a 31% decline
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