Khmers work at their machines in a garment factory near Kampong Cham, Cambodia. John Brown/Demotix. All Rights Reserved.

In June 2014, The Guardian ran a story about how slave labour is used in Thailand to catch the prawns sold on UK and US high streets. The previous year it reported how child labour is employed in Apple’s factories across China. In April 2013, the collapse of the 8-story Rana Plaza in greater Dhaka, Bangladesh, killed 1,129 people, many of whom were women garment workers. These cases of forced, child and extremely dangerous labour are part and parcel of contemporary global capitalism. 

Global supply chains are frequently portrayed as generating win-win situations, not only creating new profit opportunities for multinational firms and delivering cheap goods to northern workers, but also creating employment and reducing poverty in the Global South. For example, Jeffrey Sachs, former director of the United Nations Millennium Project, argued in The End of Poverty: How We Can Make it Happen in our Lifetime, that the proliferation of sweatshops across the Global South should be welcomed because “sweatshops are the first rung on the ladder out of extreme poverty”.

The proliferation of global supply chains has taken place within the context of the rapid expansion of the global labouring class—from around 1 billion individuals in 1980 to over 3 billion today. At the same time, global wealth has become increasingly concentrated in the hands of a tiny minority. Indeed, Oxfam estimated in 2014 that the world’s 85 richest people were as wealthy as the poorest half of the world. 

Is there a relationship between highly concentrated wealth and mass, global poverty? Where does the proliferation of global supply chains fit into this picture? And what about highly exploited and forced labour?

Over the past four decades, transnational corporations have used global supply chains to obtain cheaper inputs from, and outsource labour to, lower cost regions of the world economy. This not only cuts overheads and boosts profits, but also pressures workforces in advanced capitalist countries to accept cuts in wages or face their work also being outsourced. Put differently, global supply chains have been used to raise the rate of exploitation of labour. 

Transnational firms have raised the rate of labour exploitation throughout their supply chains, north and south.  Downward pressure on wages and conditions in one part of the chain generates similar pressures elsewhere in the chain, ad infinitum. In the Global North, where trade unions, labour standards and state regulation of labour markets are still relatively robust, increasing the rate of labour exploitation occurs mainly through technological innovation, wage reduction, and the worsening of conditions. 

Robert Reich’s film Inequality for All shows the collapse of wages for the typical male worker: from US$48,000 a year in the late 1970s down to US$33,000 a year by 2010 (inflation adjusted). In terms of maintaining consumption, there are two ways in which this wage decline can be bridged. One is through debt (which led to the subprime mortgage crisis). The other is through forcing down the price of goods imported from abroad. The latter has been achieved—and generated huge profits for US firms in the process—through reliance upon harsh labour regimes in the Global South. 

Labour market regulation is weak in much of the Global South. Trade unions are, or until recently were, banned in many countries, or under tight state control (as in China). This has allowed the increased exploitation of labour to take different forms from those in the Global North.  Here there are opportunities aplenty for child and forced labour, harsh treatment, long hours, poverty pay, and minimal or no safety standards. For example, in 2014, a Cambodian working a minimum wage job in the country’s booming textile industry earned US$100 a month (USD in Market Exchange Rate). The Clean Clothes Campaign calculates that a living wage in Cambodia—enough to meet the basic needs of a family of four—is US$283 a month, almost three times the minimum wage.

Harsh labour regimes in the Global South ensure that workers obtain a tiny fraction of the value they create. In the above case in Cambodia, workers receive around 24 cents on an US$8 T-Shirt. 

Contemporary global capitalism is predicated upon an enormous and impoverished global labouring class toiling to generate wealth for a tiny, super-rich elite. The mainstream media and development industry portrays globalisation in benign terms, framing it as an opportunity for the world’s poor to access the benefits of the world market. In reality, large sections of the world’s labouring class are severely exploited by global corporations. This is the bedrock of global capitalism. 

There are numerous grass roots campaigns, by labouring class and non-governmental organisations, as well as by more responsible governments, to combat one aspect or another of harsh labour. However, many of these campaigns understand harsh labour as a consequence of corporate malpractice, rather than as a structural feature of the global economy. 

Moreover, these campaigns are hampered by a developmental discourse that portrays the world market as a benign sphere of opportunity, and sweatshops as pathways out of poverty. Such discourses and practices serve to reproduce harsh labour and to delegitimise campaigns against it. 

Hopefully one of the outcomes of this forum in Open Democracy will be to persuade a few people to question the portrayal of the global market place as a benign sphere of opportunity. Challenging such assumptions can also feed into the attempts by harshly exploited workers to ameliorate their conditions.