The end of the sweatshop age or a new race to the bottom?
- Date: Wednesday 9 December 2020, 12:00 – 13:30
- Location: Online
- Type: Online
- Cost: Free
CERIC webinar presented by Ashok Kumar, Birkbeck University.
Using the global garment sector, the archetype of the sweatshop as its case, I propose a dynamic universal logic to global value chains in which DMP is reflected in the bargaining power of workers. This logic is based on the underlying forces of competition, in which value chains everywhere are subject to similar laws of motion, and workers everywhere are driven by a common set of interests and aspirations, albeit with diverse strategies of resistance shaped by any number of contingent factors.
My application of this logic to the contemporary garment sector is as follows: greater trade liberalisation of the mid/late 2000s resulted in a high DMP for buyers in garment GVCs and consequently a high share of value captured by increasingly oligopolistic buyers. These buyers, driven to maximize profits placed downward pressure resulting in falling source prices offered by buyers to suppliers. Under these conditions, fewer and fewer suppliers were able to compete. The result was the weakening of globalized competition and falling DMP. An almost endless pool of small garment firms across the globe began to steadily disappear, absorbed into larger rivals or forced to merge.
The emergence of large oligopolistic producers changes who is in the driver’s seat of sectoral GVC governance, altering the power relations for all the actors within it. Under the period of embedded liberalism, a higher degree of regulatory spatial inflexibility contributed to greater bargaining power for workers. As that regime ended and capital became more spatially flexible, workers’ bargaining fell with it. Now, as DMP falls, the degree of spatial flexibility falls with it. In response, workers’ bargaining power steadily grows. Indeed, these changes do not necessarily result in higher wages and benefits for workers on the shop floor, but, in totality, increase the possibilities for workers to bargain with their – now value-laden and increasingly powerful – direct employers.
Ashok Kumar is a lecture of International Political Economy at Birkbeck University. He’s the author of Monopsony Capitalism: Power and Production in the Twilight of the Sweatshop Age (2020) with Cambridge University Press.