Edited by Jonathan Michie
Chapter 13: Global Labor Standards: Their Impact and Implementation
James Heintz Estimates suggest that up to a fifth of all working individuals in developing countries live in households whose income per person falls below one dollar a day (Kaspos, 2004). The widespread incidence of poverty among working people is indicative of the general prevalence of indecent working conditions. Having a job is simply not enough – the quality of employment matters. Instituting a coordinated system of global labor standards represents one approach to creating a minimum floor of job quality. The following chapter takes a close look at the debates surrounding global labor standards. In particular, it summarizes the key arguments in support of global labor standards, evaluates the threat of negative consequences that could spring from such regulations and discusses current developments in implementation strategies. The labor standards debate: what are the issues? One of the most prevalent arguments as to why global labor standards are necessary is that they prevent a ‘race to the bottom’. That is, upward harmonization of standards stops competitive pressures from reducing labor protections to their lowest common denominator. According to this logic, global integration creates a situation in which the deterioration of basic standards is rewarded by increased competitiveness and profitability. In the absence of international cooperation, individual countries cannot raise labor standards without jeopardizing their competitive advantage. The scenario represents the typical prisoner’s dilemma problem – countries will adopt the same low standards, even if social welfare falls below its potential maximum. Because of this, competitive advantages derived from weak labor standards are...
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