The evolution of production chains over recent decades has provided a rapid expansion of flexible, insecure and informal employment in export production. This transformation towards a more integrated production of goods and services by relocating production to developing countries (Barrientos 2007, 1) and the followed increase of precarity and informality of labour have perpetuated cycles of poverty, particularly affecting two vulnerable groups of society – women and children (Bonnet et al. 2019, 11 & ILO, OECD, IOM and UNICEF 2019, 1 & 73).
Informality and precarity, closely linked to insecurity and vulnerability of labour conditions, relate to the absence of legally and explicitly recognized employment relations. Both insecurity and vulnerability of labour conditions have increased over the last decades as a result of the new economic situation that has arisen with globalisation and the resulting decentralization of production and labour chains (Tokman 2007, 2 & 15). This phenomenon, which has altered both global and local production chains, has also had an effect on labour regulations, which have been neglected at the expense of reducing production and labour costs. The absorption of the most vulnerable groups in society in this process, namely children and women, as well as the poor conditions and precarious way in which these two groups are being involved in the production chains, is a mere representation of how the production costs have become the priority.
With this in mind, the aim of this essay is to provide a critical analysis of the social and economic effects that the evolution of global and local production chains has had on women and children. In doing so, the essay argues that global and local production chains have increased levels of precarity and informality of labour by worsening conditions of employment and promoting the lack of legal and social protection, and how this, in turn, has particularly affected women and children by reinforcing their vulnerability and hampering their development.
In supporting this argument, the essay is divided into three sections: part one of Section 1 provides an analysis of the globalisation of the production chains, and part two of Section 1 examines the concepts of precarity and informality of labour. Section 2 unpacks the notions of precarity and informality of labour by looking through the lens of two vulnerable groups affected by them: women and children. This section also draws on two specific case studies – one focused on the role of women in the Turkish garment industry and the other on the role of children in the Indian silk industry – to show the rapid widespread of informal and precarious employment of women and children. Lastly, the conclusion restates the essay statement and summarises the overall arguments presented to support it.
The Globalisation of Production Chains: Socioeconomic Effects
In order to understand the globalisation of production chains and their subsequent economic and social effects we must first understand the evolution that production chains have undergone over the last decades. Production chains have drastically evolved over the last two decades due to economic, political and social changes. After the industrial revolution, the reduction in the cost of shipping led to unbundling models for production and supply activities that facilitated trade around the world. Later on, the information and communications technology revolution transformed the production process – companies that handled all the stages of the production process started to disaggregate the process, breaking it into different steps and outsourcing some of them (see Mckinsey Global Institute 2019, p. 25). This new organisation of global production systems, or so-called global value chains, based on internationally joined-up production arrangements in which the different stages of the production process are located across different countries (OECD 2020) has allowed companies to internationalise their activities in multiple locations with the aim to increase efficiency, lower costs and accelerate the production process (K. Elms & Low 2013, p. 19-20).
On the other hand, the deregularisation of labour markets and the neoliberal model of development associated to it have played a key role in the globalisation process of chains. In the 1980s, the World Bank promoted the idea that deregulation, liberalising finance and privatisation of public enterprises were required to achieve economic growth. However, this neoliberal-led globalisation model of production makes international competiveness extremely challenging, particularly for less advanced states in the competition, as it creates national dependence on the global markets at the same time that undermines local economy and self-sufficiency. As a result, in states that do not belong to the group of the advanced ones in the production competition, people are left socially unprotected and with insecurity to find employment. The consequence, in the words of Neilson (2019, p. 101 & 102), is that people have no choice but to accept low-paid and insecure employment, and, what is worse, even unsafe, demeaning and illegal work.
From the point of view of workers, the neoliberal reforms of labour markets led to the implementation of policies that aimed at de-unionization, the dismantling of employment benefits (including social protection schemes) and the introduction of flexibilised labour contracts that meant to facilitate and reduce the costs of firing and hiring workers (Tokman 2007, p. 15). This way, ‘flexible labour’ and informalisation gained momentum with the distinctive feature that they were not a choice of workers, but an imposition by neoliberal development policy, (Suliman & Weber 2018, p. 529), and with them, precarious and insecure work became pronounced globally.
The concept of informality can easily be understood when considering Mosoeta’s definition of the formal sector: “the world of employment where the employee is given a degree of participation in decision making and accesses more benefit” (Mosoeta 2001, p. 194). The notion of informal sector was first introduced by the International Labour Organization (ILO) in 1972 to refer to the functioning of the economy, especially in developing countries, where informal units of production exist due to the incapacity of the economies of these countries to create enough jobs for everyone. In developing countries, such a situation can lead to the creation of small and low-productivity units that enable people to survive by covering existing market gaps and/or because of the low cost involved in their maintenance (Beccaria & Groisman 2015, p. 23; Tokman 2007, p. 3). Then, in 2003, the ILO introduced the term of informal employment to cover the notion of informality from the perspective of jobs, defining it as “all remunerative work that is not registered, regulated or protected by existing legal or regulatory frameworks, as well as non-remunerative work undertaken in an income-producing enterprise. Informal workers do not have secure employment contracts, workers’ benefits, social protection or workers’ representation” (ILO 2020 A).
The term precarity, conceived in relation to labour conditions, is associated to “the various ways in which policies and processes that promote economic growth can also, at the same time, induce a state of precarity or precarious living” (Cruz-Del Rosario & Rigg 2019, p. 517 and 519). The term pays attention to livelihood insecurities connected to labour conditions –including the reduction of social protections – that followed welfare and Fordist conditions and emerged in the context of late capitalism (Suliman & Weber 2019, p. 525 and 528). More specifically, Casas Cortés identifies four interrelated conceptual developments that define precarity and perfectly reflect the political and economic context in which the notion was conceived: “(1) labour after the rollback of welfare state provision; (2) the new paradigm of intermittent and immaterial labour; (3) the unceasing mobility of labour; and (4) the feminization of labour and life” (Casas Cortés in Suliman & Weber 2019, p. 529). What was the result? Some authors talk about the idea of “immiserising growth”, like Mosse, when stating that “the poverty of certain categories of people is not just unimproved by growth or integration into (global) markets, but deepened by it” (2010, 1161).
When analysing the notions of precarious work and informal work, one must point out the difference between the two of them in order to properly understand their joint effects on societies: precarity is an outcome of conditions of contemporary processes of neo-liberalisation and globalisation, whereas informality refers to work that lies outside the regulation sphere and precedes globalisation (Rosario & Rigg 2019, p. 519). Further, it is worth noting that, unlike informal work, precarious work “is recognised, registered and counted but, arguably, is even less secure than informal work” (Rosario & Rigg 2019, p. 519).
Increasing precarity and informality of labour then constitute a risky combination with serious social and economic effects on societies, particularly on the most vulnerable ones. After all, the prevalence of the informal and precarious work in many parts of the world not only affects the living standards and working conditions of people but also prevents households and economic units trapped in the informal economy from reducing vulnerabilities and finding a route out of poverty (ILO 2013, p. 206).
Precarity and Informality of Labour
Both precarity and informality of labour have affected different groups of society in a disproportionate manner. This section sheds light on the effects that growing precarity and informality of labour have had on two vulnerable groups that have been especially affected by this phenomenon: women and children.
Women’s Dimension: The Case of the Garment Industry in Turkey
Over the last thirty years there has been a global increase in women’s labour force participation as a result of various reasons, including the economic growth in manufacturing trade, export processing and agricultural export crops, sectors that employ a high proportion of women, but the terms and conditions on which they have entered the labour market and the nature of the work they perform vary dramatically (Holmes and Scott 2016, p. 4).
Informal labour is a major source of employment both for men and women at the world level; however, the percentage of women workers that are informally employed in developing countries is significantly higher, 92% versus 87% (Bonnet et al. 2019, p. 5). Even though both women and men working in the informal sector work under poor working conditions and without formal rights, the vulnerability of informal workers tends to be greater for women than men because women often have double the workload (a majority of women also take care of the house and children) and low status in many societies. Furthermore, women often earn less than men in the informal economy as they usually occupy positions that are traditionally for women. In turn, they are considered to have less status. In many instances, women even earn less than men for the same type of work, as their work is considered less valued and recognised (ILO 2006, p. 40).
In general, women not only tend to spend many more hours in unpaid work than men do, but within the informal economy, women also tend to be grouped in the most precarious and poorly remunerated forms of informal labour. Further, much of women’s vulnerability lies precisely in the social, economic and cultural dynamics that often relegate unpaid family responsibilities to women. The lack of public and private support for family responsibilities means that the informal economy is often the only paid, flexible and geographically close-to-home option available that allows women to combine paid work with family responsibilities (Cassirer & Addati 2007, 1; Hart in Mabilo 2018, 28).
The flexibility of working hours and the homeworking practice has been strongly debated in the literature when dealing with the transformed role of women in production and labour markets. As Harvey (1989, 153) explains, “new labour market structures not only make it much easier to exploit the labour power of women on a part-time basis, and so to substitute lower-paid female labour for that of more highly paid and less easily laid-off core male workers, but the revival of sub-contracting and domestic and family labour systems permits a resurgence of patriarchal practices and homeworking”.
But childcare and domestic duties are not the only main reasons why women are particularly vulnerable to the informal sector. Their inability to invest in their own education and skills often constrains their employability in the formal sector; their usual lower levels of education, skills and market know-how frequently hamper their competition in the capital, labour and product markets (Tsikata & Chen in Mabilo 2018, 29).
The informal work performed by women constitutes not only unregulated work with little or no protection by labour standards, that is, no labour rights and social security schemes. In addition, informal women workers earn less than formal women workers and often work in hazardous, precarious and vulnerable working conditions. Further, they have no protection against uncertainties in their work such as safety in the workplace, nor against common concerns such as illnesses and disabilities (Chen in Holmes & Scott 2016, 4; Holmes & Scott 2016, 5).
Even though women working in the informal sector are involved in a wide range of economic activities, the Textile, Clothing, Leather and Footwear (TCLF) sector, which often involves the manufacture of garments in the informal economy and is featured by geographically dispersed, flexible and labour-intense production, is particularly representative of the effects of global and local production chains on women as it provides employment opportunities to millions of them (ILO 2020 B).
Ascoly (2006, 5) could not have explained the garment production process any better: informalisation is a tool that people involved in the global market use in order to cut costs, and this is why there is a global trend in the industry towards making the garment production more flexible and decentralised through subcontracting. Orders are frequently fulfilled through subcontracting arrangements by being sent to a large number of suppliers, who then distribute the work to a great number of subcontractors, who, in turn, often operate in the informal economy. Informal economy garment workers are in most cases, women, who are pushed into the informal economy because they had no other choice. As the case of women working informally in the Turkish garment industry will show in the next lines, local and global production chains reinforce women’s vulnerability and hamper their development as they constitute the weakest link in the global value chains (Sylvia Chant and Carolyn Pedwell in Dedeoğlu 2010, p. 4).
Since the early 1980s, the global economic integration has promoted the informalisation of the workplace in a wide range of industries and countries. In Turkey, the structural adjustment took place in the 1980s, and was mainly featured by the rapid export growth and the development of labour-intensive industries, including the garment one (Yeldan in Dedeoğlu 2010, p. 7).
Today, Turkey’s national economy is one of the many economies in the world that rely on the clothing and footwear industry (ILO 2014, p. 8). Turkey is, in fact, the biggest garment and textile producer in the Euro Mediterranean zone. Further, the Turkish industry covers the entire production cycle and a wide range of studies show that the garment industry in Turkey is primarily and increasingly informal (Barendt et al. 2005, p. 9).
A common narrative of Turkish women working in the informal economy, more particularly in the garment industry, is succulently described in Dedeoğlu’s metaphor when the author refers to women’s representation and significance in the industry: “Visible hands – Invisible women” (Dedeoğlu 2010, p. 1).
According to ILO’s data, women constitute almost half of Turkey’s population, and even though most women remain out of the informal labour market, many of them work in the informal economy (Acar & Tansel 2014, 2; Başlevent & Acar 2015, 86; ILO 2020 C). In this sense, it is worth noting that existing figures are likely to be underestimates due to the social and gender problems associated to it, as like in many other developing countries, “low-income women in Turkey tend to report themselves as housewives even if they also engage in home-based piecework or other forms of informal activities” (Dedeoğlu 2010, p. 9).
Women perform their duties through different production units – factories, workshops and home-based work. The vast majority of the Turkish garment sector is thought to operate in unregistered workplaces (Barendt et al., 2005, p. 33). The location of the workplace is another factor that highly contributes to the promotion of women’s informal work in the garment industry, allowing also this industry to be competitive in the global market. Workshops are usually located in basements and shanty towns, which allows owners to pay lower rents and easily evade official labour inspections (Dedeoğlu 2010, p.10-12).
Usually, the Turkish labour legislation is ignored. The workforce is hired to attend orders but it is immediately fired when orders stop arriving, which is traduced in the lack of continuity and security for women workers. Furthermore, the current Turkish legislation allows overtime up to 270 hours per year, but normal working days in informal workplaces have between 14 and 16 hours per day of work. When it comes to salary, companies usually do not pay the statutory social security contributions on behalf of their employees, or falsify the records (Barendt et al., 2005, p. 33).
Discrimination is usually more prevalent in informal than in formal workplaces. Women consistently and significantly earn less than men, even though Turkish women employed in the informal sector have more education than men (Tuncer & Enver 2004, p. 20). Worse, many women workers have even been victims of sexual harassment and threatened with being beaten or losing their jobs, when expressing disagreement in this regard (Barendt et al., 2005, 34).
One of the most important characteristics of Turkey’s garment export sector is the home-based sub-contracted work carried out predominately by women who have worked in workshops and factories when they were younger and continue working from home once they marry and have children. However, the real extent of this type of work is hard to determine due to its invisibility in national statistics and policy (Barendt et al., 2005, p. 34).
It is then not difficult to understand the export success of the garment industry in Turkey when looking at women’s predominant work conditions. On the other hand, it is also important to note that the shape of this Turkish industry also reproduces the existing gender inequalities and norms (Acar & Tansel 2014, p. 8), which is also, in turn, the only survival mode for the country’s garment industry.
Despite everything, as Ascoly (2004, p. 35) shows in her mapping about initiatives led by women informal workers of the garment industry, women informal workers in the Turkish garment industry have started to act in order to reverse their labour situation by establishing the Turkey Working Group on Women Homebased Workers.
Children’s Dimension: The Case of the Silk Industry in India
“Of all exploited workers, children are the most vulnerable, physically, mentally and emotionally…they need to take in energy to grow and develop and, therefore, require a greater degree of protection from the dangers of labour exploitation” (Zutshi 2009, p. 7). According to most recent global data from ILO, an estimated 152 million children are engaged in child labour globally, and almost half of them are involved in hazardous work that endangers their health, safety and development (ILO 2017, p. 11).
The ILO defines child labour as “work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development”, including here any “work that is mentally, physically, socially and morally dangerous and harmful to children and/or interferes with their schooling” (ILO 2020 C).
Child labour is forbidden by law in most countries but continues to be a reality in many of them – mainly the developing ones. It is not only a key component of the informal economy, but the informal economy provides the perfect environment for child labour to thrive. Even though its hidden nature in global supply chains reflects the complexity of contemporary production processes, it is crystal clear that child labour constitutes a global supply-chains problem in a wide range of exporting industries – agriculture; textiles and apparel; food products; mining and energy; and transport and storage (the agricultural sector the one that accounts for the largest share) (ILO 2002; ILO 2017, p. 12; ILO, OECD, IOM & UNICEF 2019, p. 11 & 16).
In this context, it is essential to understand that child labour associated with global supply chains does not only include the process directly linked to immediate suppliers (suppliers closer to final production), but it also covers the previous stages of the production process, including activities such as raw material extraction as these are required inputs to other industries (ILO, OECD, IOM & UNICEF 2019, p. 9 & 10).
Why does child labour exist? Generally speaking, children work when their survival and that of their families depend on it, and because adults take advantage of them (ILO 2020 D). Poverty is certainly the main driving force, and that is why this phenomenon is most common among children from poorer households. Poverty makes households to have to turn to child labour at the expense of their children’s education and development (ILO, OECD, IOM & UNICEF 2019, p. 20). As a consequence, child labourers grow as unskilled workers, earn low wages in adulthood and tend to live and work under insecure and often unsafe conditions, then poverty persists and when they grow older they are forced to send their children to work. This is when, in words of Sasmal and Guillen (2015, p. 1), the “child-labour trap” is formed.
Children’s families are a major cause as well. Many children become unpaid workers in family businesses (farms, informal sector workshops, etc.), which depend on family labour in order to survive (ILO 2020 E). Furthermore, in the context of agricultural business, the use of production quotas can increase the risk that families seek the help of their children to meet targets and increase income (ILO, OECD, IOM & UNICEF 2019, p. 29).
Time and production pressures can also promote suppliers to resort to labour intermediaries and subcontractors in order to meet sudden needs for additional workers. These intermediaries then sometimes subcontract further, creating long, non-transparent and informal labour supply chains in which labour inspections can become incredibly difficult to carry out. As a result, this often introduces temporary, casual, flexible and other forms of precarious labour into the supply chain. Another common strategy used by suppliers to manage production pressures is outsourcing parts of the production process, which frequently increases the chances of child labour along the product supply chain (ILO, OECD, IOM & UNICEF 2019, p. 29).
Cheap labour is another significant factor of children’s involvement in child labour dynamics. Poor households (frequently from rural areas) are often willing to offer their children to recruiters that promise them to offer them better living conditions in return for their work, which usually ends up with children working in extremely precarious conditions.
Similarly to the informal labour context that promotes women to work in the informal sector, especially in the garment industry, children are “very appropriate” workers for enterprises, as tasks performed in these types of jobs require low-skilled labour. Further, as Moulds (2015) explains, certain tasks are better suited children than for adults, such as is the case for cotton picking. In this case, employers rather hire children because their small fingers do not damage the crop. The case of child labour associated to the Indian silk industry demonstrates why De Soto (in Dedeoğlu 2010, p. 9) could not be more right when claiming that informality of labour is a way of life for the poor.
The Indian silk industry, and its respective supply chain, would not survive without child labour (Zutshi 2009, p. 8). India is the world’s second largest producer of silk, representing about 20% of world production. The silk production process involves the work of about six million people in 59,000 villages in India and is concentrated in certain southern states of the country. Karnataka is India’s primary producer of silk and produces about 60% of the silk made in India, with an estimation of 60,000 to 100,000 children working in Karnataka’s silk industry (Human Rights Watch 2003, p. 19 & 20).
In this industry, child labour occurs at the lower tier of production, that is, during the raw material extraction. The silk is then processed, transported and distributed throughout the country and bought as an input to other countries in order to be consumed across borders (ILO 2019). The significant flux of child labour in this region is directly related to the Indian caste system – and in its extension, to inter-generational poverty – as well as the employers’ willingness to continue exploiting the local families working in this industry in order to continue producing silk at the lowest possible cost.
Bonded child labour runs the vast majority of the silk production process. Bonded children, as young as 5 years old, are children working in conditions of servitude for an undetermined period of time to pay off a debt. These children are the only possibility of their parents to obtain credit so they are treated like commodities exchanged between their parents and the employer who runs the business. After all, these loans are the only business security for employees. Traders then take most of the profits by often selling the silk Sarees for almost double of the total production cost (Human Rights Watch 2003, p. 34).
Not only these children have no chance to attend school but because of the loan, they cannot seek other employment. In return for their minimum of 12-hour day shifts, six or seven days a week, children obtain small sums of money, far below the minimum wage. Their working conditions fall under the category of the worst forms of child labour by ILO Convention No. 182 concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour due to the harsh and hazardous nature of the informal work they do: children making silk threads have to dip their hands in boiling water; they breathe smoke from machinery daily and handle dead worms that cause infections (GoodWeave International 2020, p. 2; Human Rights Watch 2003, p. 8).
Despite the fact that Indian and International Law prohibit the use of bonded child labour and the public awareness and advocacy initiatives led by the national government, awareness varies greatly in different areas, and there is little regulation or enforcement from the state regarding children’s conditions of work. In some instances, the advocacy and law enforcement measures have caused the move of work from factories into private homes, where children working for their parents are not covered by the Child Labour Act and where compliance is much harder to monitor (Human Rights Watch 2003, p. 54).
One could conclude that the silk industry in India is run by the most vulnerable and poorest children in the country, promoted by socio-cultural norms, and driven by economic interests. Just as for women, the fact that children are cheaper labour does only work against them. However, in the case of children, one must not forget that, children have even less (if any) negotiation power, and often are considered to be the most docile workers by employers (FAO 2015, p. 13).
The aim of this essay is to show how the evolution of production chains has promoted women and children’s involvement in informal and precarious work. In doing so, it has argued that the evolution of global and local production chains has increased levels of precarity and informality of labour (which is translated into insecurity, flexibility, and lack of social protection), particularly affecting two vulnerable groups; women and children. To demonstrate and defend such argument, the essay critically analyses the historical evolution of production chains and their social and economic effects on women and children to then translate the theory into practice through two case studies – one focused on women’s work in the garment industry in Turkey; and the other, on children’s work in the Indian silk industry. Both examples, even though focused on different vulnerable groups, different countries, different industries, and even different stages of the production chain (one based on the final end product and the other one on the raw material extraction), show how the sustainability and development of global production chains significantly relies on the exploitation of women and children. In fact, improvement of competiveness and economic growth are embedded in the neoliberal system in which these global production chains have emerged and continue to flourish, therefore, it is not expected that informality and precarity of labour for women and children disappear anytime soon, especially when there is great resistance from those powerful groups benefiting from this exploitative system.
But vulnerability does not translate into eternal resignation. Over the past few years, the international community, civil society organisations (including workers’ groups and associations of women workers) have started to report labour abuses. That said, even at the policy level, some progress has also been made. Figures show that there is still a long way to go to achieve decent labour conditions for all – according to the latest data of the ILO, more than 60% of the world’s employed population earn their livelihoods in the informal economy and are deprived of decent working conditions (ILO 2018, p.1). However, any attempt to deny the serious economic and social consequences on societies resultant from impoverishing women and children – two undeniable pillars of contemporary global production chains – is doomed to fail. This is perhaps the advocacy message that politicians, social civil society organisations and other actors should focus on in order to win the battle against women and children’s involvement in informal and precarious labour.
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Written at: SOAS, University of London
Written for: Iris Lim
Date written: August 2020