Labour Arbitrage
Craft outsourcing is considered here in the broad context of the global distribution of labour. Labour arbitrage operates on the principle that whereas the price of goods can remain relatively fixed the cost of labour differs according to place. Using this logic, many global corporations engage in a race to the bottom’ to find manufacturers offering lowest wages and minimum environmental standards (Berle and Means 1967). This has led to the exodus of manufacturing from the First to the Third World, where wages are lower. According to a 2007 Parliamentary inquiry into manufacturing in Australia, the proportion of the workforce in manufacturing has halved since 1950, particularly in textile and metal products (House Standing Committee on Economics, Finance and Public Administration 2007). Figures such as this show the effects of global outsourcing on local or national workforces.
Today the exodus of labour is extending beyond manufacture. The wave of offshoring has more recently affected the business sector, with back office’ services moving in particular to India. There is even the report of Chinese prisoners involved in gold farming’, building up credits on online games such as World of Warcraft through the monotonous repetition of basic tasks (Vincent 2011). While providing employment in poorer countries, offshoring has also coincided today with increasing gaps between rich and poor to the point where the overall consumption of the richest 20 per cent of the world’s people is 16 times that of the poorest 20 per cent (United Nations Development Programme 2000). The global distribution of labour can be seen to have benefitted the global North in many ways. Lower prices on consumer goods imported from China have kept inflation down in the First World. The air is also cleaner now that many polluting factories have closed in the manufacturing regions of North America, Europe and Australia. And internalized class conflict between managers and workers has diminished, reflected in declining trade union membership across the developed world (Australian Labour Market Statistics 2004). But these benefits are based on the lower wages and environmental standards of the global South, to where the factories have moved.
The more there is of it the more it produces every Porto Alegre Map turning, so that the profits rise quicker and quicker. He that kills a breeding sow destroys Porto Alegre Map all her offspring to the thousandth generation. He that murders a crown destroys all that might have produced even scores of pounds. Remember that six pounds a year is but a groat a day. For this little sum which may be daily wasted either in time or expense unperceived a man off credit may, on his own security, have the constant possession and use of a hundred pounds. So much in stock briskly turned by an industrious man produces great advantage.
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