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Globalisation and Social Change

GLOBALISATION AND LABOUR

GLOBALISATION AND A NEW INTERNATIONAL DIVISION OF LABOUR

A new international division of labour has emerged in which more and more routine manufacturing production and employment is done in the Third World cities. You have already dealt with outsourcing in chapter 4 and contract farming in chapter 5. Here we simply draw upon the example of Nike company to illustrate how this works.

Nike grew enormously from its inception in the 1960s. Nike grew as an importer of shoes. The founder Phil Knight imported shoes from Japan and sold them at athletics meetings. The company grew to a multinational enterprise, a transnational corporation. Its headquarters are in Beverton, just outside Portland, Oregon. Only two US factories ever made shoes for Nike. In the 1960s they were made in Japan. As costs increased production shifted to South Korea in mid-1970s. Labour costs grew in South Korea, so in the 1980s production widened to Thailand and Indonesia. In the 1990s we in India produce Nike. However, if labour is cheaper elsewhere production centres will move somewhere else. This entire process makes the labouring population very vulnerable and insecure. This flexibility of labour often works in favour of the producers. Instead of mass production of goods at a centralised location (Fordism), we have moved to a system of flexible production at dispersed locations (post-Fordism).

General Motors produces an ostensiblyAmerican car such as Pontiac Le Mans. Of the showroom price of $20,000, only $7,600 goes to Americans (workers and management in Detroit, lawyers and bankers in New York, lobbyists in Washington, and General Motors shareholders all over the country).

BOX 6.8

Of the rest:

¾ ¾

¾ ¾ ¾ ¾

48 per cent goes to South Korea for labour and assembly. 28 per cent to Japan for advanced components such as engines and electronics. 12 per cent to Germany for styling and design engineering. 7 per cent to Taiwan and Singapore for small components. 4 per cent to the United Kingdom for marketing, and about 1 per cent to Barbados or Ireland for data processing

(Reich 1991)

105

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