Back in the days when open markets were seen as an economic miracle for the “developing world,” the club of the emerging capitalist mini-powers of Brazil, Russia, India, China, and South Africa, the BRICS, was hailed as the shiny new engine of neoliberalism. The export-driven BRICS economies were supposed to lift not just those countries but entire regions out of economic-backwater status. But that dream soon foundered under the weight of the global recession. Today it seems workers in BRICS countries are falling ever further behind.
New research on the long-term impacts of export-driven industries in the BRICS nations shows that, after decades of free-trade policies and massive foreign investment, the manufacturing sector upon which the most hopes were pegged—apparel manufacturing—still fails to pay anything near a living wage for workers. In fact, the garment sector has, in economic terms, fallen tragically short of providing a sustainable level of overall compensation to support a country’s developing tax and social-insurance systems. All of which should raise some pretty serious doubts about the potential for global trade and market liberalization to build a sustainable economy for developing countries.
Maybe what workers in these aspiring middle-class countries need now isn’t growth so much as equity. So how should we think about a living wage for all in fast-changing emerging economies?
The study by the Centre for Environment and Sustainability at the UK’s University of Surrey proposes what it calls a “Living Labour Compensation” benchmark. The LLC builds on the emerging movement for an “Asia Floor Wage”—a proposed base wage for the continent that labor advocates have been pushing for years—as a way to ensure that economic development is more equitably shared across the globe and within individual countries.
The idea behind the LLC is to create a clear compensation level that can be held up as sustainable for a given country. It can then slow or hopefully reverse the global “race to the bottom” of wages and working conditions by curbing multinationals’ incentives to shift their operations to neighboring countries with lower costs. Instituting a regional living wage would, in effect, prevent multinationals from shipping jobs overseas to maintain their bottom lines.
It’s important to note that what the researchers determined to be the LLC level for the BRICS is significantly higher than previous living-wage estimates—in fact, workers in these countries are earning just half of what would be needed to achieve a decent standard of living. All of which makes sense: For Western consumers, it’s almost taken for granted that the mass-produced items that fill even the cheapest retail shops are the product of heavily exploited labor in the poor countries that fuel our import markets. Over the years, sweatshop conditions that would be unacceptable in the Global North have become normalized as the price other workers pay for our lifestyles. The LLC measurements show that, even by “developing world” income standards, the types of jobs commonly seen as a magic bullet for economic modernization still exclude workers from a modern standard of living. Far from spurring the growth of the middle class, therefore, garment jobs are feeding a massive permanent underclass.