Transcript Lecture Twelve: Disconnecting Production and Consumption

Lecture 12
Global Inequality: (Dis)connecting
Consumption from Production
Globalization: Connecting Production &
Consumption Around the World
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The process of globalization changes how production
and consumption are socially organized
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Through rationalization the capitalist system has created
an interconnected global economy where producers and
consumers around the world are linked to each other
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The process of rational, economic globalization has
geographically separated production from
consumption
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The large “consumer economies” (like the US) are not the
same as the large “producer economies” (like China), but they
are dependent upon each other
Disconnecting Producers and Consumers
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Globalization has a great impact on both producers
and consumers, as there is a growing distance
between producers of goods and the consumers of
those goods
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Consumers have limited knowledge about how
products are made, where, and by whom
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In addition, as Collin’s discusses in Threads,
producers have little knowledge about who is making
the decisions about working conditions, wages,
production methods
Global Consumption
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Inequality in global consumption
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USA and Canada account for 31.5% of the world’s
consumer spending, but only have 5.2% of the world’s
population
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South Asia account for 2% of consumer spending, and has
22.4% of the population
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USA and Canada’s consumption increases 2.3% annually
Asian consumption grows over 6% annually
Sub-Saharan Africa accounts for 1.2% of consumer
spending, but has 10.9% of the population
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Sub-Saharan Africa’s consumption has decreased 25% over
the last 20 years
Icon of Global Consumption
Global Production
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Economic globalization has created an international division of
labor, where:
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Consumer economies such as the US, Japan, and the European
Union are focused on jobs that are high skill, high technology, and
high wages
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Producer economies on the other hand, like China and Mexico are
focused on “Cheap Labor” where jobs are low skill, low technology,
and low wages
Compare the minimum wage in these countries (in $):
 France - 17,231
 USA - 13,624
 Mexico - 1,648
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China – none set
World Factory
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World Factory: the DOL is based on
geographic separation in an assembly line
fashion
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Commodities are not produced in one location or
even one country, but around the world
Global consumer and global labor force
reproduced each other
Social Reproduction of Labor
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As firms (corporations) seek out the cheapest
labor on the market they encounter social,
political, and economic contexts that allow
them to pay low wages
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Social – culture, ideologies
Political – trade agreements, national laws,
government enforcement of laws, unionization
Economic – supply and demand
Why Did Liz Claiborne Look for Workers
in Aquascalientes?
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What made the social reproduction of cheap labor
possible in Aquascalientes?
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Greenfields – little or no labor experience
Trade agreements between countries
Gender and Racial Ideologies
Immigration and Migration
Low consumption levels
Workers in Aquascalientes are producers, but not
consumers

Only 1/5th of the worlds population consumes global
products
Social: Gender Ideologies
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"In the early days women made up as much
as 80% of the assembly plant workforce,
today they number close to 60%. While they
can legally be hired at the age of 16, it is
common for these girl-women to get false
documents in order to go to work at ages as
young as 12, 13 or 14.“
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Separate Spheres Ideology reinforces women's
association with domestic labor and their earning as
supplemental
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“What she is, not what she does”
Gender Ideologies and Workers Rights
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However, due to women’s domestic responsibilities
they challenge the working conditions in different
ways than men and ask for different things
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Attempt to re-embed the economy in social relations
When women organized in Aguascalientes what did
they demand?
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Gender equality, childcare, community development
Political: Free Trade Agreements
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Free trade: markets should be self-regulating
allowing for the free flow of goods, capital, and
services unhindered by government restrictions
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NAFTA: North American Free Trade Agreement
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Founded in 1994 to promote free trade among US,
Canada, and Mexico
Regulates flow of goods, services, and capital
Subordinates national regulation
NAFTA deepens the International Division of Labor
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Forced many Mexican farmers off the land, contributing the
documented and undocumented migration into the US
Economic: Multi-national Corporate
Organization
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Deterritorialization: workers and owners are
separated by (1) space and (2) layers of
subcontracting.
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Firms pressure manufactures to produce goods at
a cheaper rate, who in turn put pressure on
workers
Deskilled labor force, with no skill
development
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Quality = control and speed
Economic: Maquiladoras
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Maquiladora: factory that imports materials and
equipment for assembly or manufacturing and then
re-exports the assembled product
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Export Processing Zones: assembly plants located in
areas that have cheap labor and few if any labor and
environmental laws
Presented as first stage of economic development,
however:
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No stimulation to local/national industries
Wages are too low to support non-essential consumption
Foreign Owned Maquiladoras
Low Wages
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Minimum wage in Mexico is $3.40 PER DAY
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Hourly compensation for workers in manufacturing
averages $1.21 in Mexico vs. $17.70 in the US
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Standard of Living: Work @ Auto Trim de Mexico
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Weekly Salary = $58.09
Weekly Expenses = $54.00
Minimal amount leftover per week for clothes, shoes,
entertainment and medical attention
How Rich Are You?
http://www.globalrichlist.com/
Global Inequality
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The process of globalization has created a large
interconnected and interdependent global economy,
whereby the high level of consumption in wealthy
Western countries (like the US) is dependent on the
low wages and low level of consumption in poorer
developing countries (like in Asia, Latin America,
and Africa)
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To understand global inequality we need to understand the
relationship between countries in a global economy