Trade and Employment From Myths to Facts - International Labour ...

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Trade and Employment: From Myths to Facts to improve their terms of employment. These conditions also contribute to the attainment of lower unit labour costs with women workers. 6 Underlying the global tendency for an increase in women’s share of employment is a churning of the global labour market whereby women’s job gains in some countries come at the expense of women workers in other countries. As predicted by standard trade theory, the increase in developing countries’ labour-intensive exports produced by women workers has come at the expense of destruction of jobs held by women through import competition in high-income economies. OECD trade with developing countries provides a striking example. Kucera and Milberg (2007) found that the expansion of the OECD trade with developing countries over the 1978–95 period resulted in disproportionate job losses for women in OECD countries, who constituted the majority of workers in import-competing industries such as textiles, garments, footwear and leather goods. Such trade-related job losses have continued in the United States (US) in the late 1990s and early 2000s, with losses falling disproportionately on women workers (Callahan and Vijaya, 2009). These job losses have been compensated to some extent by the growth of service sector jobs, but whether the wage levels and the gender wage gaps in these growing sectors are more favourable is the subject of ongoing research. 7 The intensified trade competition among developing countries following the end of the Agreement on Textiles and Clothing (ATC) on 31 December 2004 provides a more recent example of women workers competing for jobs in the same industries. The liberalization of trade in garments has brought a shift in exports, and thus in employment, from Central America and Africa toward Asia, especially toward China. The Dominican Republic, El Salvador, Honduras and Mexico experienced sharp declines in the export value and volume to the United States (Emerging Textiles, 2007). China and India increased their share of imports in the European Union and the United States while smaller economies – Fiji, the Maldives, Mongolia, Nepal – experienced absolute decline in their exports. In each of these cases, women’s jobs and livelihoods were disproportionately adversely affected. Mauritius, which was highly dependent on the trade protections provided by the Multi-Fibre Agreement (MFA), and its successor the ATC, lost its export competitiveness with the end of the ATC, and experienced sharp declines in exports and employment, especially for women (Otobe, 2008). Other Asian countries have faced price competition that puts down- 6 While home-based work predominantly draws on women’s labour, men have been also increasingly employed as home-based workers under increased competitive pressures. For example, in the 1990s, firms in several of India’s import-competing manufacturing sectors sought to lower costs by hiring workers in small-scale, home-based workshops where wages were lower (Rani and Unni, 2009). 7 Kongar (2008) shows that the gender wage gap in the US services sector widened between 1990 and 2001, even as occupational segregation declined. In high-income developing countries, such as the Republic of Korea and Taiwan (China), there were differing trends over 1980–2002. While gender earnings gaps declined in services sectors where women’s share of employment was rising, especially in Taiwan, after the Asian financial crisis (1997) the earnings gaps have widened in several services sectors in the Republic of Korea (Berik, 2008). 182
Chapter 5: Gender aspects of trade ward pressure on wages and other labour costs and hence working conditions (Adhikari and Yamamoto, 2006). While these shifts do not necessarily result in a zero-sum change in employment, they underscore the instability of trade-related jobs and suggest large-scale hardships of adjustment due to trade liberalization and preference erosion. In sum, women in developing countries achieved employment gains during the era of trade reforms of the late twentieth century since they facilitate lower unit labour costs for employers than is the case with their male counterparts. However, the relative employment gains of women overall should not obscure the costs of adjustment generated elsewhere: job losses of both male workers in import-competing industries and the jobs lost for women workers elsewhere in export industries that experienced erosion of competitiveness. 5.3.3 Empirical evidence: Wage levels, wage growth and gender wage gaps Wages are often used as the key indicator to track changes in job quality associated with international trade. If trade reforms have led to growth in women’s employment opportunities relative to men, have these job options offered women higher wages relative to their alternatives and allowed wage growth so as to break the low-wage mould for women’s jobs? The wage levels and working conditions in EPZs/export-factories and their trajectories have been contentious issues. In a classic contribution Lim (1990) and recently Kabeer (2004) contested the argument of critics that export sector jobs represent poor options for women in developing countries. Lim argued that critics focused on the early stages of EPZs and relied on case studies that did not use a multivariate approach in examining working conditions. She argued that jobs in EPZs offered higher wages to women workers compared to their alternatives in the local economy, and challenged critics to use a local yardstick in assessing these jobs. Further, she predicted that over time working conditions in EPZs would improve as the EPZs matured and the demand for women’s labour continued to grow. Recent evidence on relative wage levels in EPZs is generally consistent with Lim’s and Kabeer’s argument. Wage levels and non-wage benefits are generally better than in non-EPZ factories and wages in alternative employment in the economy (Amengual and Milberg, 2008; Glick and Roubaud, 2006; Kabeer and Mahmud, 2004). Thus, EPZ jobs provide greater potential for alleviation of income poverty. Based on a 2001 survey of women workers in Bangladesh, Kabeer and Mahmud (2004) further argue that EPZ workers’ earnings are well above the local poverty line. That said, EPZs in Mauritius, Mexico and Central America provide contrary evidence: real monthly earnings in large EPZ establishments in Mauritius have been below the average earnings in large non-EPZ establishments after 1991 (Otobe, 2008). In a study that aims to take stock of relative wages in maquiladoras (assembly factories that produce for export) after two decades of operation, Fussell (2000) finds 183
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Trade and Employment From Myths to
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Trade and Employment From Myths to
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PREFACE Trade negotiations -bilater
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Trade and Employment: From Myths to
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EDITORS AND CONTRIBUTORS EDITORS Ma
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ACKNOWLEDGEMENTS The editors wish t
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NEW EVIDENCE ON TRADE AND EMPLOYMEN
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Chapter 2: New evidence on trade an
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Region Annualized percentage change
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Region 1980 1985 1990 1995 2000 200
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Figure 2.4.b: Long-run association
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20 See Harrison and Rodriguez-Clare
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ASSESSING THE IMPACT OF TRADE ON EM
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APPPENDIX 3.A: TABLES Chapter 3: As
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TRADE AND THE INFORMAL ECONOMY 4.1
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Chapter 4: Trade and the informal e
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