Discussion
The labour market is regarded as one of the primary channels through which globalization pose impacts on developing nations. Elevated rate of import penetration, export sales, competitiveness in services along with foreign direct investments as well as exchange rate fluctuations by global capital movements can serve influential role on employment and on labour incomes. However a universal concern lays that ‘cheap’ labour and the ‘race to the bottom’ may be act as a turnover side of globalization (Ducruet 2016). In order to establish greater degree of competitiveness, countries may require dismantling their trade limitations, eliminate their legal compliances and privatize their state-owned enterprises and condense excess rate of staffing in their distended bureaucracies (Faber 2014). These reforms however could result to the immense loss of ‘good’ jobs which reflect high degree of stability and security and further enhance unemployment rates. However on the other hand, delocalization of production to emerging nations in sectors associated to textile manufacturing, food processing could further amplify the demand for labour resulting to the development of employment opportunities as well as elevating workers’ incomes (Rodrik 2018). The following paper evaluates the way developed nations such as US, UK and Australia have been maximising its gains through importing cheap labour and resources from developing nations like Sri Lanka, Philippines and Bangladesh. In addition to this, the report will highlight how these developing nations have been devoid of benefitting the gains of globalization thus being incompetent to elevate their nation capitals.
Globalization and the benefits of trade
The US has been intrinsically engaged in international trade in order to attain goods as well as services which some other nations can generate at a considerably lower cost than it can in exchange of goods, products and services. If every country cost similar expenditure to make in every country there can be witnessed no relevant foundation for global trade. Moutsatsos (2018) reveal that a country’s engagement in global trade exhibits a tendency to stimulate its purchasing power as well. Thus US, UK with the persistent import of textiles from developing countries facilitates their incomes expansion and further aid them to attain labour at economical or lower cost than they would have spent on their own citizens (Baylis, Smith and Owens 2017). When these developed nations engage in global trade, they can produce higher rate of gross domestic product (GDP) from its land, labour as well as resources. Such an elevated level of GDP tend to generate does not utilize them for production purposes which other nations can produce at a reduced resource cost (Haque and Azmat 2015). It has been noted that globalization has proficiently created an environment which enables export-led economic expansion to condense poverty by proposing wages and incomes in low-earning countries. Though globalization has enabled developing nations to experience the wide ranging, export led growth and expansion which elevated the purchasing ability of developing nations like Sri Lanka or Bangladesh; the economic gains have not been equally shared between the developed or gainers and the developing which are identified to be positioned at the losing side (Zhang and Rasiah 2015).
Globalization and the benefits of trade
Moutsatsos (2018) observed that Asia comprises a huge populace whereby certain segments are still undergoing rapid expansion as a result high number of people alone reveals high level of incompetence to establish market opportunities. Thus it takes immense purchasing ability with large populaces to interpret demand and needs into effectual market demand. Reports reveal that substantial negotiations has been putting individual emphasis on utilizing trades in order to accelerate high level of economic development in currently evaluated low income nations. It has been noted that out of the world’s 6.7 million inhabitants, around half of the proportion live on less than $ 3 per day and around 1.36 billion has been observed to live on less than $2 per day (Haque and Azmat 2015). As a result, segment of population with diminutive rate of purchasing power fail to signify substantial market opportunities. Typically developing nations pose critical confrontations towards the elevated constrains to their exportations in the very goods and products which gives them a comparative advantage in the market (Baylis, Smith and Owens 2017). These goods and services primarily incorporate the products generated by labour-intensive producers who manufacture products such as textiles, apparel as well as footwear along with other forms of products such as rice, sugar, cotton and other resources. However, certain opponents of globalization have emphasized on the expansion of global trade which will raise the standard of living to that of the low income developing nations (Faber 2014). Though the fundamental aim of globalization is to essentially accelerate wide ranging economic development which develops wage rates in low-income nations, these nations still have been unable to obtain equivalent share of profits and income in comparison to US or UK (Haque and Azmat 2015). However globalization with market expansion have been facilitating populace of the developing countries with an ability to attain purchasing power which will develop improved markets for services developed countries in a more proficient manner and the growth of enhanced markets which in return will aim to create greater rate of job opportunities in industries with high comparative benefits.
Dynamic transform in competitiveness
Reports expose that developed nations like US, UK and Australia possess a well-functioning labour intensified market along with a high level of mobile workforce. An insignificant section of employees anticipate any longer having continual engagement in a single job throughout the career. It has been revealed that an approximate 6 million citizens in US exhibit a propensity to shift career preferences and over 400,000 recently developed jobs have been generated in the US (Chang 2015). This has led the US to experience a very low unemployment rate by international standards along with a significant number of undocumented labourers in jobs which major proportion of Americans do not encourage. Furthermore, underlying the conjectures of economic theoretical aspects, the occurrence of liberalization enables the incomes and profits of the developed nations to exceed the losses or low income opportunities of the developing countries (Moutsatsos 2018). However authors claim that if a country is to obtain the prospective gains from the process of globalization, significant rise in both consumer buying power as well as potential GDP modifications are required to be facilitated to occur. Furthermore, the market of the Sri Lanka or Bangladesh must also be permitted to efficiently transfer resources from the industries which expose reduced rate of competitiveness to sectors which can participate. However, these forms of modifications are neither identified as costless or unproblematic. These further result to the labour force of these nations with immense proficiency to develop a sense of discontentment who are engaged to sectors which are in the verge of decline. Another segment of labour force or investors further exhibit uncertainty involved in particular machinery and factories which have lost its ability to show any forms of efficiency in the market. Zhang and Rasiah (2015) claim that a well-functioning labour market which developed countries like US and Australia possess have immense importance to efficiently facilitate modification as proficiently and painlessly as possible (Choudhury and Rahman 2017). Furthermore, it has been noted that though with flourishing labour market, modifications can be expensive in both monetary as well as emotional grounds.
Dynamic transform in competitiveness
Impacts of Low Wage Crisis on Bangladeshi Manufacturing Sector Workers
Bangladesh once an agriculture intensified nation shifted its market towards industrialization for the past few decades. Though at its initial phase of industrialization the country fundamentally intended to attain internal needs and demands gradually it opened its avenues of exportation to Europe region as well as to the US (Islam and Pattak 2017). Bangladesh with its elevated textile manufacturing industry has emerged and had been significantly flourishing in the nation by the Trading Corporation of Bangladesh (TCB). Studies reveal the fundamental earnings generated from the export industry develop primarily from its garment exportation to Europe, Australia and US (Chang 2015). For example, leading fashion brands such as H&M and Zara along with Aldi import from labourers of Bangladesh and Sri Lanka. The apparel import sector is recognized as one of the first and leading sectors proficiently as well as efficiently engaged in global outsourcing (Ducruet 2016). Several apparel enterprises like Gap, Inc, Zara and Nike source at an international level without owning any production services. Though these developing nations get the opportunity to obtain market share, the level of their benefits is immensely minimal while comparing the overall profits of the buyers (Belal,Cooper and Khan 2015).
Apparel Importation Process of UK and US
US, UK, Australia as well as Japan being identified as the significant apparel importers demonstrate that textiles as well as clothing manufacturing for the United States ranging from 1990-2008 has rapidly undergone an elevation of around 750.02% from $9,587 million to an approximate of $82,900 million. As a result, the visible shortage raised by around 1,3400.57% from $4,500 million to $ 64,500 million (Bernard, Smeets and Warzynski 2017).
Such a trend of increase in the process of outsourcing for US and UK importers have continued with an insignificant alteration in this development has been witnessed in the year 2013 because of recession era (Ford and Gillan 2017). However, this development of US persists to elevate with around 46% in importation that led the import capacity to reach around $122.39 in 2017 (Ruwanpura 2016).
Apparel Import of US from 2002-2014
Source: (Ford and Gillan 2017)
Sweatshops contributions to leading textile firms
Reports reveal that leading business organizations of US, UK as well as Australia have their primary product manufacturing segments in Asian countries and still have been continuing to purchase cheap or economical labour from countries like Sri Lanka and Bangladesh (Haque and Azmat 2015). Though these developing nations have attained substantial degree of opportunities through the process of globalization, the highly contentious sweatshop labour for leading brands still persists as a mainstream area of concern (Moutsatsos 2018). Over a decade following to the sweatshop labour associated to leading importers of US and UK , the area of substantial concern appeared as an critical; epidemic pertaining to global textile sector and apparel manufacturing industry (Zhang and Rasiah 2015).
Employment in these countries are thus encountering greater degree of job uncertainty and low wage incomes as a considerable number of labourers are employed to temporary or contractual, day labour in those manufacturing industries who purpose to supply to first world nations (Islam and Pattak 2017). These forms of unstable employment have created extensive level of criticalities for trade unions to proficiently organize, recruit and pay standard wage to the workforce. As agreements are not effectively renewed on time an average of 27% of labours in Bangladesh belong to temporary or short-term employment sector whereby workforce in Philippines has undergone an elevation of around 80% in one factory and around 40% at other manufacturing plants (Baylis, Smith and Owens 2017). Though Ford and Gillan (2017) reveal that in Sri Lanka remuneration have been paid on productivity targets regardless to such unlawful practices, unwarranted or extreme level of overtime has been identified as a customary ‘norm’ in both apparel and leisure wear factories in Bangladesh and Philippines (Young 2017). Further incidents of mental as well as physical exploitation have been identified when labourers in these nations exhibited greater level of incompetence in accomplishing production targets in one factory resulting in inconsistent capital growth and market share (Bernard, Smeets and Warzynski 2017).
Conclusion
Labour force engaged in several manufacturing industries in three countries Sri Lanka, Philippines and Bangladesh revealed that none of the workers are paid the legal minimal remuneration. Other studies have provided relevant understanding of the exploitation of female labourers engaged in these factories by critical globalized supply chains. The women labour involved in manufacturing sectors of these developing nations comprise a substantial segment of the labour force. However, these situations are reflect immense level of disillusionment and frustration as major sections of labours who are women perform extensive work but are usually being unpaid, exploited and demoralized. Thus to conclude it can be stated that globalization has served a beneficial role to several countries specifically the developed ones like the US, UK and Australia. However due to certain modifications required in order to obtain these gains of amplified globalization, it can create complexities to several developing nations.
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