Business and Society; the Globalization of Work
Byline: Bernardo M. Villegas
Much space has been devoted in the Western press to the recent report coming from the International Monetary Fund (IMF) that the globalization of work in the last two decades "has affected negatively the share of wages in the total income pie of the developed countries." In the early l980s, wages accounted for about 73 percent and 64 percent, respectively, of the Gross Domestic Product of the European Union and the United State. In 2005, the figures had declined to 64 percent and 57 percent, respectively.
Wages in the developed countries, such as Japan and the United States, have been kept down by the availability of more low-cost labor in the developing nations like India, China, Indonesia, and Thailand. It is estimated that the supply of labor in the world economy has multiplied four times between l980 and 2005. What the complaining Western press did not mention is that this globalization of labor has liberated hundreds of millions of workers in the developing countries from dehumanizing poverty. The impoverished workers have benefited either from the outsourcing of both manufacturing and service-oriented activities by multinational firms in the developed countries to the developing ones or from the massive flow of migrant workers to the developed countries, which served as a lid on rising wages in the richer nations.
I am not underestimating the predicament faced by workers in the developed countries in making both ends meet in their respective family finances. I do know of the difficulties of ordinary workers in Barcelona, where I am temporarily residing, who have difficulties paying for the education of their children or the installment in their home mortgage because of the inability of their wages to rise with inflation. These workers have all the right to ask their government to be responsible in the management of the economy so that inflation is kept under control. As in Japan, the workers have all the right to demand from the stockholders of the corporations for which they work to share more of their exploding profits in the form of benefits for the workers. They also have all the right to seek greater flexibility in work arrangements so that they can supplement the income they earn from wages with entrepreneurial profits coming from some small business that their families can invest in.
To give meaning to the hardships that they may be facing because of the globalization of work, the workers of the developed nations may be made more conscious of their actually contributing to an international common good by helping the poorest of the poor in the emerging economies such as China and India to earn at least two or three US dollars a day from the manufacturing or service-oriented enterprises that have relocated from the developed to the developing nations.
As nations look for innovative solutions to the problems posed by the globalization of human work, it would be useful for their leaders -- whatever their religious persuasions -- to heed the advice contained in the Compendium of the Social Doctrine of the Church in paragraphs 312 to 314: "The globalization of the economy, with the liberalization of markets, the stiffening of competition, the increase of specialized businesses in providing goods and service, requires greater flexibility in the labour market and in organizing and managing production processes. …