Globalization of Production, Work and Human Development: Is a Race to the Bottom Inevitable?

By Rizwanul Islam

Economic globalization involves trade, capital flows and the movement of labour, and an important element in that process is the globalization of production. With the gradual dismantling of trade barriers, and capital flows becoming easier, globalization of production has flourished. It is no longer necessary to produce goods in one location. Even though a product may bear the mark of being produced in a particular country, its components may come from different locations. Particularly for high-tech products, research and development (R&D) is usually carried out in developed countries, components are made in different countries depending on their competencies, and the final assembly takes place in another country. This approach is also used for labour-intensive goods such as garments, shoes, etc.

Globalization of production has influenced the world of work in ways not seen before. While some impacts have been positive from the point of view of workers, others have given rise to serious concerns. On the positive side, new employment opportunities hitherto unknown in many developing countries have opened. On the other hand, serious pressure on the working class has come through the stagnation of real wages and adverse workplace conditions. The term ‘race to the bottom’ has come into circulation in this context. But this does not have to be the only way forward, since there are useful positive aspects from which workers could benefit alongside the rest of the global community. This paper explores possible paths to such outcomes.