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82 Women in the Economy (MWG-011)
The fact that activity is spatially concentrated also has implications for the distribution of the gains
from trade. Specifically, the literature that studies the impact of international trade on wages
completely neglected the fact that industries affected by trade are often spatially concentrated within a
country. As a result of this concentration, large local effects may be felt even when the aggregate
national effect is small.
Spatial concentration also plays a role in determining the impact of trade liberalization in developing
countries. Large national companies are joining together more and more on an international basis.
The relocation of production stages (outsourcing) that existed for a long time in small and mid-size
business at home and abroad increased in the 1970s. The international division of labor became
intensified when extreme labor-intensive stages of production in the clothing and electronic industries
were moved from the industrial nations of the North to the countries of Southern Europe, North
Africa, Eastern Asia and Latin America. At the same time, the labor costs and the incidental wage
costs were gradually reduced in highly industrialised countries. It cost jobs for women. The reason is
that labor-intensive production is predominantly carried out by women. Women work in the ‘cheap-
wage countries’, as the name already says, cheaply. For employers, there are no incidental wage costs
and no taxes to be paid. But women also work there more willingly because very few of them are
organized in trade unions.
The newly industrialised countries of Southeast Asia owe their high rate of growth that is acclaimed as
an economic miracle to the millions of women who are drawn into the suction of international
manufacturing plants in a global rotation process and then spit out again. Especially young women are
hired for dumping prices and after a few years, after marriage or starting a family, are laid off. Alone
in Southeast Asia the employment of women has climbed from 25% to 44% since 1970. In Bangladesh,
700,000 jobs were created in just under 20 years.
The surge of transnational corporations towards ever cheaper workers and ever larger profit margins
has led to a corporation mobility in the past few decades that is unprecedented in history. Since wages
in the newly industrialised countries of Southeast Asia are increasing (also for women), European and
American companies award their orders to their still cheaper competitors. Clothing manufacturers in
Hong Kong pass on their orders to subcontractors in Vietnam and China for example. Working
conditions in the production plants and the service industries that were swiftly created are often
extremely burdensome and discriminating. With almost no trade union organization, the mobilization
of resistance proves to be difficult.
The new phase of the global division of labor reveals itself not only in the increasing tempo of
production relocation and the ever-greater fragmentation of individual stages of production.
Transnational groups of affiliated companies no longer limit their activities to the production sector.
They have moved on to the service industry sector. Hotel chains, banks and insurance companies
operate across borders. Besides the liberalization of the financial markets, the new areas of
information technology and communication technology are door openers for new branches. As of
recently, groups of affiliated companies offer advertising, market research, bookkeeping, management
consultation, legal consultation, as well as data processing, etc. Women sit on-line in satellite offices
or at home at a computer and do not have to leave their residential areas and can ‘earn some extra
money’ on an hourly basis. It saves on the construction of public transportation systems, on an
educational infrastructure for looking after and raising children, and on institutions for the care and
welfare of elderly persons and those who cannot help themselves.
On the other end of this ‘global conveyor belt,’ 70% percent of the former 900,000 jobs in the textile
and clothing industries were eliminated between 1970 and 1995 – again predominantly women’s jobs.
This elimination was even more thorough in the former GDR: only 26,500 jobs remained of the
320,000 in the textile industry. The textile and clothing industries were especially affected in Saxony,
where 93 years before ‘Saxony’s most significant labor dispute’ was carried out and went down in
history. It involved a strike by the textile worker from Crimmitschau concerning the 10-hour work
day, higher wages and better working conditions. The textile industry has been almost completely
‘liquidated’ there today, and predominately women’s jobs have been eliminated. Other jobs in the
region are not available to them. The absence of resistance in the form of large strikes and the
(continued) lack of support by male dominated trade unions as in the past has to do with the fact that
the ‘job site family’ is supposed to be palatable to women, instead of their fight to save jobs. When
men’s jobs were affected by plant shutdowns, the affected parties could count on the solidarity of
women (i.e. Bischof erode, the mineworker’s chain).

Q4. Write a note on feminisation of poverty and workforce.
Ans. The catch phrase ‘globalization’ is an invention of American management schools. It suggests
that only the companies that promptly and ruthlessly adjust to the new global competition for markets
and locations are able to survive. Only those who become global players and extend their business