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Introduction to Globalization

“Profound changes in the ways in which work is organized and carried out have taken place over the last 200 years, particularly in the Western world and more recently in the rapidly industrializing nations of Asia. Farming and craftwork, which predominated for many centuries, were largely replaced by the industrial revolution, and with it, skilled workers who had once exercised substantial control over their work processes were replaced by lower-skilled labor in new machine- based production technologies [19]. The introduction of Taylorism at the beginning of the 20th century—a new “scientific” approach to maximizing productivity— further reshaped the workplace by breaking down complex, traditional craft-based work processes into small, individual tasks to be performed in a specified amount of time, in a repetitive manner, and controlled by supervisors or mid-level management, leading to the birth of the assembly line. And while originally used for manufacturing, this lead to the assembly line mode of work organization has been transposed to service-sector and white-collar office jobs and to centralized multinational organizations which now divide up work tasks and processes often across national borders. The result of these and other 20th century developments: deskilled workers in many occupations with the power to control the production process increasingly concentrated in the hands of employers and management.

Clearly influenced by globalization, the transformations in work and work organization that began 200 years ago are now accelerating so much as to even be considered another industrial revolution [20]. Globalization has included, among other things: outsourcing of labor to developing countries; feminization of the work force; increases in unemployment, under- employment, and employment insecurity; increases in temporary, part-time, flexible labor—“precarious work”; and a sharp increase in the economic gap between the rich and the poor (see chapter 2). In the 1998 Tokyo Declaration, occupational health experts from Europe, Japan, and the United States described this new world of work—“organization restructuring, mergers, acquisitions and downsizing, the frantic pace of work and life, the erosion of leisure time and/or the blending of work and home time” [21]—and the motor behind it: “. . . driven by economic and technological changes aiming at short-term productivity and profit gain” [21].

The social and economic forces brought about by global economic competition are determining the ways in which work is unhealthy, how noxious it is, and who are most exposed. In fact, these changes disproportionately affect people in lower socioeconomic positions, particularly women and immigrant ethnic minority groups, whose health is already more vulnerable. Women are becoming the poorest component of the workforce, and in turn, the most numerous, being employed in low- income service-sector and manufacturing jobs (see chapter 2). Migrant workers searching desperately for employment are being pulled into developed nations where they often become part of disadvantaged minority groups concentrated in the lowest-skilled work and marginal sectors of the economy that offer minimal or no benefits, such as health insurance.

In industrialized countries, this globalization of the economy over the last 30 years has led to a second round of new systems of work organization, such as lean production [22], and the intensification of work through increased work demands on a reduced workforce.

 Consider some of the following data:

• one-third or more major organizations broadly reduced their workforce in the 1990s and between January 1999 and December 2001;

• 9.9 million jobs were eliminated, and temporary employment multiplied six-fold to nearly three million between 1982-1998 [10, pp. 184-185];

• the average work year for working age couples in the United States has increased by nearly 700 hours in the last two decades of the twentieth century [23], more hours per year than any other industrialized country. Time away from home, due to commuting, has increased significantly while vacation time has decreased [24].

Although little addressed in the United States, these changing working conditions are negatively affecting worker health, indicating that the gains of “lean” production for employers come at a high cost to workers’ health (see chapters 6 and 7). For example, in a 2007 U.S. survey, about three-quarters (74%) of workers at all occupational levels reported feeling stress from work [25]. And this stress proves very costly: disability reported as due to job stress in 1997 (23 days) was four times greater than the median for all other injuries and illnesses combined [26]. In a 1998 study of 46,000 workers, health care costs were nearly 50% greater for employees reporting high levels of stress in comparison to those who were “stress-free” [27].

While the causes of ill health may be in question, the spiraling costs of employee health—both due to work injuries and payment of health insurance—has moved health and work to front and center stage. Clearly, not all stakeholders (e.g., management, labor, employees, government) share the same interest in protecting worker health [12, 15], with many in management/business seeing it primarily as a cost and a drain on profits. More recently, however, efforts are being made to redefine worker health as an investment and source of profit. This book addresses how these social and economic processes are changing both work and the health of working populations.

Notwithstanding the abundant problems around work in developing countries, this book focuses mainly on the detrimental health effects experienced by working people in industrialized countries, particularly in the United States, albeit with the aim that this knowledge can be applied in developing countries as well.

Taken from: Schnall PL, Dobson M, Rosskam E, Editors Unhealthy Work: Causes, Consequences, Cures. Baywood Publishing, 2009.

Robots to Play a Crucial Role in Future Foxconn Expansion

by Peter Schnall & Erin Wigger

Foxconn is planning to add one million robots to its workforce within the next three years. This is alarming news for those concerned about China’s working class citizens. Foxconn has been growing at an enormous pace and has doubled its workforce over the last few years and is now ranked third largest employer in the world. They are faced with rising labor costs which they have attempted to address through increased productivity of its workforce and also by expanding west to China’s Chengdu province – home to a still large population of poor agricultural workers and a new source of inexpensive, unorganized labor.

News reports have been appearing in the press for the past five years about Foxconn workers’ struggle for higher wages and better working conditions. Few gains were made by workers however until 2010, when Foxconn received a large amount of bad publicity due to the suicides of 11 of its workers. The sensationalism of the story was due in part to the collective and public nature of the suicides (which involved workers in similar fashion leaping to their death from the roof of Foxconn buildings), paired with the fact that Foxconn’s Shenzhen plant is the major manufacturing headquarters of the popular Apple iPhone and IPad.

Foxconn responded to the public outcry resulting from these deaths by raising the salary of its workers and installing netting around the roofs of its buildings to forestall further suicides. They also required workers to sign a “no suicide” clause in their work contract, which prevents their families from receiving a death benefit.

But Foxconns’ dilemma hasn’t been resolved. As its work force continues to swell so does the threat of organized worker activities. (Of course, Foxconn workers like all other workers in China are represented by an official Chinese Union answerable to the Chinese government and which fails to represent the interests of workers in almost every case. But the threat of organized resistance poses a serious problem for Foxconn: how to continue increasing productivity while lowering costs in a competitive economy.

With pressure to produce still more coming from Apple and other end users and the company complaining of low profit margins, Foxconn has now sought to increase its production processes by means of robotics. According to Terry Gou, the company’s founder and chairman, Foxconn already makes use of some 10,000 robots and sees many benefits in expanding its use of robots. Gou plans to use the new robots to perform tasks such as spraying, welding and assembling. He projects that utilizing up to 1 million robots will improve the working conditions at his plant for Foxconn workers by eliminating those parts of the production process which are repetitive and menial, effectively elevating it’s workforce into positions with increased skill-level and value.

But will the modernization of Foxconn’s plants into a futuristic, automated factory actually mean better working conditions for China’s workers, or just a loss of jobs? Gou’s argument seems to favor the hypothesis of Skill Biased Technological Change (SBTC), which purports to positively favor a shift from an un-skilled labor force to skilled workers. SBTC has, however, become the center of debate on the unequal distribution of power in the workplace (management vs. workers) and the increasing inequality of wealth between social classes in Capitalist societies.

How can Foxconn reduce costs if they hire robots unless their “employment” is accompanied by the layoff of workers (workers being the most expensive part of the production process)?

Despite Gou’s words to the contrary, workers at Foxconn’s plants remain skeptical. Tania Branigan of The Guardian reports that some workers question whether Gou’s announcement was sincere. “I am suspicious,” said Liu Kaiming, of the Institute of Contemporary Observation, which supports workers in Guangdong, “Machines can do it, but think about the cost … overall, workers are still much cheaper. This is probably just for sensational effect, [to] put pressure on workers.”

And it is difficult to imagine that the small and hard-won improvements workers have fought for at Foxconn are not under attack. In essence, how can workers complain of labor practices which cause them to feel like machines – enforced silence on the production line, short or non-existent breaks, etc – when the company can literally replace them with robots capable of working 24-hours a day without complaint?

In the long run, replacing humans with robots seems a dead-end process. After all, robots are unlikely candidates to purchase the products of their own labors. Without a well-paid labor force capitalism lacks a market for its goods. This problem is a flashback to the issues raised by Jeremy Rifkin in 1995 in his book “The End of Work: The decline of the Global Labor Force and the Dawn of the Post-Market Era” in which he argued that many jobs are never coming back and that we should prepare for a world without work. Of course, the emergence of China and the employment of millions there has been the major argument against his thesis. More on this in a later entry…

Globalization, Foxconn and the Chinese working people. What is the problem?

by Peter Schnall and Erin Wigger

We begin herein a series of blogs looking at the relationship between the processes of globalization and the worldwide development of industrial production as they impact on work organization and affect the lives of working men and women. Central to this exploration will be an in depth look at Foxconn, one of China’s foremost companies, which we will use as an example of issues related to globalization. China has one of the fastest growing economies in the world and has become over the past several decades one of the most powerful countries in the world. While China has always been rich in natural resources, the secret to its success is not a product of its agricultural production or natural resources, but it’s immense population which provides a large, well-trained and inexpensive (relative to the Western world) workforce..

Of China’s many rapidly growing companies, one stands out from the rest; among the Fortune Global 500 with $102 billion in revenue in 2010 and now with almost 1 million workers, Foxconn and it’s parent company Hon Hai have set the standard which many other companies now follow. Founded in 1974 by Terry Gou (currently Chairman and President), the Taiwanese company set out to provide businesses with alternatives to more expensive electronics manufacturing. According to the Foxconn Global website, Foxconn has achieved remarkable sales and growth figures. Between 2009 and 2010 the company’s consolidated revenues grew 52.98% to NT$2.997 trillion (US$104.6 billion) (CNA English News).

Now the largest electronics manufacturing company in the world and the fifth largest company worldwide in number of employees after Walmart, China National Petroleum, State Grid, & the U.S. Postal Service – Foxconn supplies companies such as Apple, Dell, Hewlett-Packard and Sony with notebooks, desktop computers, monitors, smart phones, iPads and other popular products. “Foxconn has 13 mainland factories in nine cities in China. Planned factories include expanding sites at Chengdu in Sichuan province, Wuhan in Hubei province, and Zhengzhou in Henan province.” (Wikipedia) The first of these plants was its Shenzhen plant, which opened in 1988. Since then, it has become Foxconn’s largest plant, a walled city of more than 1.15 square miles including 15 factories, its own fire department, worker dormitories and a small city of restaurants and shops, all located on one property.

Although the plant is responsible for a large portion of the company’s overall success, it has also been the subject of repeated reports of worker mistreatment. It was in the news repeatedly last year after it experienced a number of suicides – 14 to date.  Foxconn responded to the suicides by raising wages 66%, boosting its number of counselors, and making stress management programs available to workers. It also built safety netting around its factory to prevent further suicide attempts and, for a short while, asked its workers to sign an anti-suicide pact. Foxconn has also responded to the suicides at the plant with claims it’s number of suicides, per capita, are not much higher than China’s national average, implying the suicides are not really a problem.

Suicides and employee discontent at the Shenzhen plant are not the only problems facing Foxconn. Foxconn has also been accused of discrimination against main-land Chinese workers and the forcing of many rural farmers off their land to make way for the huge factory developments currently heading farther and farther inland. Foxconn’s Chengdu plant is one of these. You might have already heard of the Chengdu plant; it appeared in the news last month after three workers were killed in an explosion caused by inadequately ventilated combustible dust. Built in the rural southwestern province of Sichuan, Chengdu was rapidly converted into a facility to make iPads in response to high demand from Apple. Currently staffed by 80,000 workers, Foxconn is looking to add another 220,000 workers at the Chengdu facility in coming years.

The cluster of suicides, the explosion at Chengdu, and the long-standing complaints by workers raise serious questions for some. Why did this group of young workers commit suicide? Did Foxconn’s work environment and employee policies play a role in these deaths? What are the labor practices at Foxconn? Is there a connection between Foxconn’s rapid growth, its labor practices and the explosion at Chengdu? Many newspapers and watch-dog groups such as SACOM (Students and Scholars Against Corporate Misbehavior) have charged the company with “dangerous working environment, inadequate measures on work safety, excessive and forced overtime work, and that workers are deprived of a social life.” Can these accusations be substantiated  and what is Foxconn’s defense? 

In subsequent blogs we will look at these issues regarding Foxconn. And beyond Foxconn, we need to ask if these problems are limited to Foxconn or are these issues typical of China? Finally, we want to raise the question about the relationship between these working conditions in Chinese factories and the overall process of globalization? Stayed tuned for subsequent blogs, the first of which will examine what is publicly known about working conditions at the Shenzhen plant.

 

March 5, 2008 Woodrow Wilson Presentation given by Dr. Peter Schnall

On March 5, 2008, participants from health, economic, academic, labor, and other sectors gathered at the Woodrow Wilson Center to discuss work’s contribution to public health and national economic costs. Research shows that employees facing high demands at their job, combined with low control over the work process or little reward, are more likely to die of heart disease and suffer from mental health problems than workers without such job stressors. The panelists of this event presented data on the relationship between work and health in order to illustrate its global impact. 

To watch Dr. Peter Schnall’s presentation visit the Woodrow Wilson Center page here.

The Physical Manifestations of Unhealthy Work

Dr. Peter Schnall, director of the Center for Social Epidemiology, opened the event by stating that “global epidemics are not natural”. Rather, they are products of globalization, the labor-intensive work organization it fosters, and increasing social inequality. “Globalization is contributing to a changing nature of work . . . which is contributing to poorer health of many peoples worldwide,” said Schnall. He described stress as a social process related to societal and occupational organization. The physical manifestations of stress and musculoskeletal disorders are caused by the high demands, long hours, job strain, effort-reward imbalance, and hazardous conditions of many work environments. Thus, the culpability of poor health outcomes, such as cardiovascular disease and mental health conditions, should not be placed on genes or individuals, but rather unhealthy working conditions. 

Schnall also noted that cardiovascular disease is currently the leading cause of death worldwide and its prevalence rate continues to rise in both developed and developing countries. According to the American Heart Association, cardiovascular disease causes around 40 percent of all U.S. deaths. Globally, 900 million people suffer from hypertension; approximately 60-80 million of them live in the United States. Schnall used his own research to demonstrate the relationship between job strain and cardiovascular disease, showing that blood pressure is elevated during work hours and sharply rises when demanding or stressful activities are performed. 

The Global Impact of Unhealthy Work Organization

Paul Landsbergis, associate professor of Community and Preventive Medicine at the Mount Sinai School of Medicine, continued the discussion by outlining the global impact of unhealthy work conditions. He focused on recent trends in work organization including, privatization, de-regulation, lean production techniques, income inequality, increasing contingent work, and longer work hours. “These overriding pressures force workers to work harder and longer,” said Landsbergis, as well as weaken job control and security, deteriorate social support, and elevate stress levels. He also explained that as developed countries strive to attract foreign capital, many businesses have adopted longer hours and more deadline pressures, often emphasizing quantity and speed over quality and safety. These conditions, along with forced and child labor, have made job conditions detrimental to workers’ health and family dynamics. 

 

 

The Mental Health Consequences of Work
Marnie Dobson, associate director of the Center for Social Epidemiology, addressed the mental health consequences of work, which are increasing along with health care and productivity costs. Currently, 9.6 percent of U.S. adults suffer from depression within a 12 month period. “Changes resulting from globalization and from work are key

contributing factors to depression and mental disorders,” stated Dobson. She also linked effort-reward imbalance and occupational position to depression and exposure to work stressors to mental fatigue, psychological distress, and sleep disorders. Dobson emphasized the importance of addressing the role that work plays, especially since the World Health Organization projects depression to be the second greatest contributor to the global disease burden by 2020. 

Finally, Dobson described how work-related illnesses have direct and indirect economic consequences including, high health insurance premiums, worker’s compensation costs, production losses due to sick and disability leave, and employee turnover. The top contributors to these costs include hypertension, heart attacks, and depression. She referred to one study that found that depression cost U.S. employers $44 billion in one year. Nevertheless, “business has really yet to focus on the deleterious effects of the workplace as a way to deter productivity losses and heath problems in their employees,” said Dobson.

Adopting Systematic Reform

Ellen Rosskam, public policy scholar at the Woodrow Wilson Center, called for the re-organization of work to protect employee health, and offered legislative strategies to reverse the grave trends outlined by the panelists before her. The presented solutions included more participatory action research, job re-design centered on reducing job strain, collective bargaining based on workplace democracy, and collaborative interventions that increased employee job control. Rosskam noted t

hat, “collaborative approaches in interventions have led to improved co-worker relations, better employment security, and stronger social support, which is an important buffer against job strain”. She also advocated for establishing a universal floor for basic social protection to promote health within the workplace. For the United States, this floor would include minimum staffing levels, bans on mandatory overtime, limits on work hours, and guaranteed paid family, vacation, and sick leave. 

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