Globalization and Labor Rights: Assessing the Impact

Abstract

Labor Rights and Multinational Production. By Layna Mosley . New York: Cambridge University Press, 2011. 306 pp., $28.99 paperback (ISBN-13: 978-0521694414). Layna Mosley asks a simple yet significant question in Labor Rights and Multinational Production : Under what conditions might globalization be good or bad for collective labor rights? Her answer is eloquent and persuasive. Direct ownership has a positive effect, whereas subcontracting (outsourcing) has a negative effect. This is because multinational corporations (MNCs) that directly own their production facilities have a material incentive to bring best practices to foreign affiliates, which includes respect for internationally recognized core labor rights. Direct ownership thus engenders a “climb to the top.” In contrast, where MNCs subcontract production, cost considerations hold sway. And since collective labor rights tend to increase production costs, violations of these rights by subcontractors are common. In these cases, the “race to the bottom” dynamic prevails. Academic debates on the impact of international economic integration on labor stretch back decades. Economic liberals and modernization theorists envisioned a world in which, as market relations expanded, countries would embark on stages of development that would lead to a strong middle class and ever improving conditions for labor (Kerr, Dunlop, Harbison, and Myers 1960; Rostow 1971). Scholars in the dependency tradition saw the world quite differently, arguing that the economic relationship between developed and developing countries created power imbalances in which MNCs and local capital benefited at the expense of workers (Cardoso and Faletto …