This week’s posts concern the failure of globalism.

Sunday’s entry showed how globalism was failing as early as the year 2000. Yesterday’s confirmed that more people are getting progressively poorer and that what counts for trade actually isn’t according to the classic definition.

In 2009, the World Trade Organisation (WTO) and the International Labor Organisation (ILO) published a joint study, ‘Globalization and Informal Jobs in Developing Countries’. In These Times had a concise article on the study.

One wonders if it came as a surprise to the WTO to find that workers in the developing world have not benefited from globalisation. Remember how our betters presented globalisation as the tide that was going to lift all boats, not just those of Westerners?

A few brief excerpts from the article follow about the effect of globalisation on the developing world:

… many are still poor and lack job security and social safety nets.

… the number of workers in the informal economy—defined as unregistered businesses not subject to law or regulations— has increased or remained constant.

“Informal” work has accounted for 60 percent of new jobs in developing economies. The incidences range anywhere from 30 percent in Latin American to as much as 80 percent in sub-Saharan and South Asian countries.

The following are direct quotes from the summary of the study (emphases mine):

Our study shows that the earlier hope, that the effects of growth and international integration would trickle down and automatically eliminate informal employment, is not warranted. Instead, certain types of informal employment arise in reaction to a failure on the part of public authorities to provide proper social security and to bring taxes down to levels compatible with strong work incentives and formal job creation.

It was hoped that this would result in an increase in wages for low-skilled labour or improved working conditions, including by means of an increase in the number of formal sector jobs for low-skilled workers. Evidence suggests, however, that the skill premium has increased both in developed and in emerging economies, making low-skilled workers (relatively) worse off,” the report says. The ever shifting dynamic of globalization has caused demand for more highly skilled workers, leaving laborers in poverty or stuck in informal workplaces.

That’s a surprise? Really? It’s hard to know what to say. The words ‘naive’ and ‘stupid’ come to mind.

Furthermore, those countries have a lot of corruption at all levels. Cheap labour must be had in order to maximise profit. It’s also a form of servitude; these businessmen and contractors know that. To them, poorly paid workers are less than human.

The ever hopeful conclusion — that the ‘formal’ sector should be offering more jobs to the poor — is one with which I agree but, given the nature of employment and social conditions in these countries, is unlikely to be attained for the foreseeable future.

Yet again, here’s another huge failure for globalism.

Tomorrow: Globalism as seen in 2014

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