Economic Development and Women

Ranjeeta Basu. Women and Politics around the World: A Comparative History and Survey. Editor: Joyce Gelb & Marian Lief Palley. Volume 1: Issues. Santa Barbara, CA: ABC-CLIO, 2009.

This essay will focus on how changes in the world economy since the 1980s have affected women in different ways in different parts of the world. Perhaps the most important change in the world economy has been rapid trade liberalization accompanied by structural adjustment policies in much of the developing world. These changes have had and continue to have a significant impact on poverty, income distribution, labor force participation rates, and working conditions for millions of women, men, and children around the world. This essay explores the major issues related to economic development using a combination of economic theory, empirical evidence, research findings, and reports by policymakers and grassroots activists.

Changes in the World Economy

In the past 25 years, there have been dramatic reductions in trade barriers across the developing world. According to the 2005 Human Development Report, “The average tariff rate in developing countries has fallen from 25% in the late 1980s to 11% today …” As a result, exports as a share of income have risen dramatically in every region in the world, with East Asia seeing the greatest increase from around 35 percent in 1990 to more than 50 percent in 2003. Much of this increase in exports is driven by an increase in manufacturing exports, although trade in services has also increased over this period. By contrast, the share of agriculture in world trade has steadily fallen since 1980 as a result of protectionist policies in developed countries. Developing countries have increased their share of world trade in all sectors except for agriculture; for instance, manufacturing goods account for roughly 80 percent of exports from developing countries.

Another important change in the world economy over the past couple of decades has been the reduction in barriers to foreign direct investment. In response, transnational corporations have chosen to locate different stages of the production process in different countries. This trend has not only contributed to the fragmentation of the production process but has also increased linkages between countries via a complicated network of economic processes. Increased reliance on exports and the fragmentation of the production process have together created a world where countries are increasingly dependent on each other.

Standard trade theory (Heckscher-Ohlin-Samuelson theory and the Stolper-Samuelson theorem) suggests that in each country a reduction in trade barriers should decrease the real return to the scarce factor relative to the other country and increase the real return to the abundant factor. For example, if labor is the scarce factor then a reduction in trade barriers should lower the real wages (wages corrected for inflation) in this country. It is argued that with trade liberalization, developing countries should specialize in goods in which they have a comparative advantage, and firms in developed countries may also relocate plants to developing countries to maintain competitiveness in these goods. In most cases, these would tend to be goods that are labor intensive and require few skills. Therefore, the volume of labor-intensive goods should increase and low-skilled workers in developing countries should gain in terms of higher wages and higher levels of employment. Because women tend to be overrepresented in the low-skilled labor force, theory suggests that most women in developing countries should experience higher employment rates and higher wages. By implication, income-based poverty among women should decline with reduction of trade barriers. Because high-skilled labor tends to be the scarce factor in most developing countries and because theory predicts that high-skilled labor is worse off with the reduction of trade barriers, one should expect to see a reduction in inequalities of income in developing countries. In the next few sections, each of these predictions will be explored in light of empirical evidence, a gender-sensitive framework of analysis, research findings, and policy documents.

Impact on Female Labor Force Participation and Employment

First, look at the empirical evidence on labor force participation rates for women in different regions across the world as shown in Table 1.

The numbers indicate that the labor force participation rate for women is lower than that for men in all regions. The labor force participation rate for men has remained constant or has declined slightly over time. The labor force participation rates for women vary widely across regions. In Sub-Saharan Africa and East Asia, the labor force participation rates are fairly high and have remained fairly constant over the past 25 years. In Europe and South Asia, the labor force participation rates have fallen over this period. In the Americas, labor force participation rates for women have increased over this period. Overall, female labor force participation rates were slightly lower in 2004 (52.5 percent) compared with 1994 (53.2 percent). Changes in statistical definitions of employment and data collection methods might explain some of the variations across time and across regions. In addition, several factors other than trade liberalization affect labor force participation rates, such as education, per capita gross domestic product, religion, and demographic and cultural factors (Behrman and Zhang 1994). However, reductions in trade barriers have had a significant impact on female labor force participation rates. The impact in each country depends on the nature of the economy and the sectoral distribution of women in the labor force.

1980 1990 2000 2004
Source: International Labor Organization, based on population between the ages of 15 and 65 years.
East Asia and Pacific
 Male 91.8 90.7 90.6 89.5
 Female 73.5 75.1 74.2 73.4
Europe and Central Asia
 Male 85.1 81.7 76.1 76.2
 Female 70.7 66.9 59.5 60.1
Latin America and Caribbean
 Male 88.9 88.9 87.6 87.4
 Female 36.0 44.7 54.3 56.6
Middle East and North Africa
 Male 81.8 82 81.1 81.5
 Female 20.5 25.3 28.9 30.8
South Asia
 Male 91.7 90.0 89.3 89.0
 Female 48.5 43.4 38.9 38.6
Sub-Saharan Africa
 Male 91.3 91.4 91.2 90.3
 Female 66.8 67.4 64.9 64.7
United States
 Male 88.1 88.1 85.9 84.9
 Female 60.4 68.4 72.4 72.3

Table 1. Labor Force Participation Rates (%) by Gender and Region: 1980 to 2004

In the manufacturing sector, there seems to be some agreement in the literature about the implicit connection between export orientation of the economy and increased female employment within semi-industrialized economies (Joekes 1995, 1999; Ozler 2000). According to some studies, women tend to constitute a high proportion of the labor force in such industries as textiles, apparel, shoes, and leather products. These studies identify the lower wage rates and skill requirements associated with female employment as being key to the growing proportion of women in export-oriented, labor-intensive industries. Although most of these increases occurred between mid-1960 and mid-1980, there are more recent examples, such as Bangladesh, where in 1998 80 percent of the 2 million jobs created in the textile and garment industry were held by women (Paul-Mazumdar and Begum 2002).

Other studies (Ghosh 2003) have found that increases in the share of women in total employment were short-lived in many Asian economies. By the 1990s, economies of countries such as Hong Kong, South Korea, Indonesia, and Thailand were already experiencing a decline in female employment in manufacturing. In fact, most countries in Southeast Asia, excluding China and Malaysia, have seen a decline in manufacturing employment.

According to Ghiara (1999) , lowering the trade barriers did not result in a sustained increase in female employment in the export sector in Mexico. The total urban employment of male and female workers in the export sector did increase but not at the same rate as the growth in total employment in the nontradable sector. Looking at sectoral employment from 1987 to 1993 (Table 2), there is no evidence of reallocation of labor from other sectors to the export sectors.

From 1987 to 1990, the percentage of the total labor force employed in the export industries in Mexico remained the same. The percentage of the male labor force employed in export industries fell slightly, and the percentage of the female labor force employed in the export sector increased, thereby increasing the percentage share of female workers in the total labor force employed in export industries from 31 percent to 40 percent. From 1991 to 1993, the percentage of workers in the male and female labor force working in export industries in Mexico dropped, but the drop was more pronounced for female workers resulting in a fall in the percentage share of female workers in the total labor force working in export industries.

Total Male Female % Female
Year Export Non-tradable Export Non-tradable Export Non-tradable Export Non-tradable
Source: Ghiara (1999) .
1987 10.8 66.6 12.5 62.9 7.5 73.7 31.2 61.0
1988 10.9 66.6 12.3 63.1 8.2 73.5 33.7 58.7
1989 11.5 65.0 12.7 61.3 9.2 72.3 37.3 61.0
1990 10.6 65.7 11.6 62.0 8.8 72.6 40.7 62.5
1991 9.6 67.7 10.4 64.3 8.3 73.8 45.0 64.9
1992 8.1 74.2 9.4 69.7 5.9 81.9 36.8 68.8
1993 7.5 75.8 9.0 70.9 5.2 84.0 35.4 72.4

Table 2. Mexico’s Employment Structure by Trade Sectors (%)

Turning to the agricultural sector across the world, it is clear that the agricultural sector continues to be the dominant one accounting for 43 percent of total employment in the world, although its share of total employment is shrinking across the world. Agricultural subsidies provided by developed countries to their farmers have lowered the world price of such major staple crops as wheat and corn. With lowering of trade barriers, subsidized agricultural products have flooded the markets in many developing countries. For example, cotton farmers in Burkina Faso are trying to compete against U.S. farmers who receive more than $4 billion a year in subsidies. Unable to compete, local farmers have migrated to urban areas looking for alternative employment opportunities. Fewer and fewer men remain in agriculture because of rural-to-urban migration and rising mortalities attributed to armed conflict. As a result there has been an increase in the number of female-headed households in rural areas. For example, almost one-third of all rural households in Sub-Saharan Africa are now headed by women. Current data reveal that women are responsible for producing 60 to 80 percent of the food in developing countries. In Sub-Saharan Africa, women produce almost 80 percent of basic food products. In Southeast Asia, women do 90 percent of rice cultivation. In the literature, this trend has been referred to as the “feminization of agriculture.”

Some studies that focus on the agricultural sector have found that lowering the trade barriers has often hurt women in this sector (Fontana et al. 1998). They typically lack access to credit, land, and technology, which makes it much harder for them to take advantage of expanded market opportunities arising due to globalization. According to the Food and Agriculture Organization (FAO), in India, Nepal, and Thailand less than 10 percent of women in agriculture own land. In Jamaica, for example, women receive only 5 percent of loans granted by the Agricultural Credit Bank. According to other studies (Barrientos 1996; Sachs 1996), lowering trade barriers in horticultural production has created a huge export market, which relies on low-skilled seasonal female labor in large numbers. For example, in Chile, Barrientos and Perrons (1999) have found that female fruit workers have seen an increase in paid employment as a result of the lowering of trade barriers.

In looking at the impact of globalization on labor force participation by women, one must recognize the gendered context of this discussion. Much of the work women do is unpaid labor. Women continue to be the primary caretakers for children, the old and the infirm, the sick and the dying, in addition to being responsible for most of the domestic chores in the home. Therefore, women’s participation in paid employment must be looked at within the context of the unpaid work they do. First, the extent to which women are able to participate in paid employment depends on the extent and nature of their unpaid work. For example, women with small children are often constrained in their ability to participate in paid employment. As a result, women often end up in part-time, flexible, uncertain jobs that typically pay less than full-time stable jobs. Therefore, though globalization may bring paid employment opportunities, women are often not able to take advantage of these opportunities.

Along with gender, race and class also play a role in mediating the impact of globalization on women. Women belonging to a lower economic class often might not have a choice about whether they can or should participate in paid employment. As a result they work long hours for very little pay and continue to do their unpaid work, too. Studies in Asia and Africa have shown that rural women work as much as 13 hours per week more than men do. According to another study (Singh 1987), “In the Indian Himalayas, a pair of bullocks work 1064 hours, a man works 1212 hours and a woman works 3485 hours in a year on a one hectare farm.” A lot of this time is spent on the unpaid work necessary for survival. For example, on average, rural women spend almost an hour each day gathering fuel and carrying water. The impact of globalization on land-use patterns and the environment in developing countries means women might now have to spend up to four hours a day gathering fuel alone. Given these impossible constraints, women often pass on some of these tasks to their daughters; thus, a woman’s increased participation in paid employment could have the perverse effect of lowering school attendance by girls.

On the other hand, when women from a higher economic class, whether in a developing country or in a developed country, increase their participation in paid employment they are able to command a higher wage than women from lower economic classes, which, in turn, means they are able to convert part of their unpaid work to paid work for women in lower economic classes. Therefore, increased labor force participation by women from a higher economic class is made possible because some of their caretaking and domestic responsibilities shift to women from a lower economic class. For example, in the 1990s, Chile’s economic growth led to increased labor force participation by Chilean women, which provided domestic work opportunities for Peruvian women displaced by economic restructuring in Peru. Additionally, the decrease in government expenditure on social services, which is part of the structural adjustment package, has increased the burden on women to provide these social services as part of their unpaid work.

In conclusion, in some industries in the manufacturing sector there has been an increase in female labor force participation, but in many cases this increase was not sustained in the long run. In the agricultural sector, women were often hurt by globalization, although the picture is slightly different in the nontraditional horticultural sector, where there has been an increase in seasonal employment. In all cases, the impact of globalization on female participation in paid employment is constrained by their participation in unpaid work that is invisible but necessary for survival and care of dependent members of society.

Impact on Female Wages

The Stolper-Samuelson theorem predicts that in developing countries the lowering of trade barriers will narrow the gap in wages between skilled (predominantly male) and unskilled (predominantly female) labor and in the process close the wage gap between women and men. But most studies (Feenstra and Hanson 1995, Hanson and Harrison 1995, Robbins 1996) have shown that the wage gap between skilled and unskilled labor has increased over the past 25 years. In many countries, wages of high-skilled labor have increased whereas wages of low-skilled labor have remained the same or in some cases have fallen over this period. Because women tend to be more concentrated in the low-skilled labor force, the gender wage gap has also persisted in most countries. Several studies (Majid 2004; Freeman et al. 2001) have found a relationship between globalization and wages whereby globalization results in lower wages initially but over time leads to higher wages for high-skilled labor. According to these studies (Rama 2003) there is no impact on wages of unskilled labor. These findings are similar to the findings of Simon Kuznet who found a relationship between economic growth and income inequality whereby economic growth leads to an increase in income inequality initially but over time leads to lower income inequality. The predictions of the Stolper-Samuelson theory did not hold for several reasons. Some (Robbins 1996) have looked at labor demand and supply shifts to explain movements in wages and have found that supply shifts alone do not explain the increased wage premium for skilled workers, which implies that demand shifts have also played a role. Others (Tan and Batra 1997) have argued that skill-biased technological change has increased the demand for skilled labor. Robbins (1995) argues that the two explanations do not have to be competing ones and that one could imagine skill-enhancing trade where the transfer of technology or foreign capital resulting from trade leads to a greater demand for skilled labor (Feenstra and Hanson 1995). This could imply that either skilled labor is a complementary input to capital or skilled labor facilitates technological change (Pissarides 1997).

A study (Oostendorp 2004) that focused on the impact of globalization found that the gender gap in wages in low-skilled occupations has narrowed in developing and developed countries. But the gender gap in wages in high-skilled occupations has narrowed in developed countries and widened in developing countries. It could be that much of the increase in demand for low-skilled labor resulting from globalization has been for female labor. Although this has not had a positive impact on female wages it has had a negative impact on male wages, thereby narrowing the gender wage gap in low-skilled occupations. Conversely it is possible that much of the increase in demand for high-skilled labor has been for male labor, which has widened the gender wage gap in high-skilled occupations.

Another study (Ghiara 1999) that focused on the impact of trade liberalization on the gender gap in Mexico found that the total gender gap in urban wages narrowed slightly between 1987 and 1993. Although both men and women gained in terms of education, women gained more; the increased return to education over this period would explain the small decrease in the wage differential between male and female labor. When the analysis was disaggregated by industry, Ghiara (1999) found that the gender wage gap increased in a selected manufacturing industry (machinery) at a greater rate than in a selected service industry (education and health). In 1987, the mean female wage in the education and health industry was about the same as in the machinery industry. But in 1993, the mean female wage was higher in the service industry than in the machinery industry. The total differential in wages in 1987 was lower in the machinery industry than in the service industry. From 1987 to 1993 the total differential increased by a greater amount in the machinery industry than in the service industry, such that in 1993 the differential was higher in the machinery industry compared with the service industry. In 1987, the human capital characteristics of female workers in the machinery industry were probably the same or better than those of male workers; therefore, the entire differential is due to unexplained factors such as labor market discrimination. In 1993, the human capital characteristics of female workers in the machinery industry dropped compared with the male workers so that now human capital explained more of the total wage differential. This could happen if the industry was hiring more unskilled female workers and more skilled male workers, which results in a deskilling of the female labor force. In addition, the occupation structure within the machinery industry reveals that 42 percent of direct production workers are women but only 36 percent of supervisors are women, which suggests the existence of a kind of glass ceiling for female workers in this industry. In contrast, the human capital characteristics of female workers compared with male workers in the service industry are much more equal so it explains less of the total wage differential. But the total differential is fairly small to begin with, and there has been a very small increase in the wage differential from 1987 to 1993. This analysis reveals the misleading nature of aggregate analysis and blanket statements about the impact of trade liberalization on the total female labor force.

Impact on Poverty and Economic Well-Being

There is much controversy in the literature about the impact of trade liberalization on female poverty and economic well-being of women. One school of thought argues that trade liberalization results in fragmentation of the production process and the deskilling of the labor force. This is called female marginalization by inclusion and segregation into low-paying jobs (Fernandez-Kelly 1983). It is seen as exploitation of women by the growing globalization of the world economy. Disruptive world market forces result in a high turnover rate that adversely affects the lives of the women working in these industries. The only reason women are being sought is because they can be paid a lower wage, can be given fewer benefits, and are less likely to be unionized (Ong 1983). According to this view, by entering the labor market women are subjected to employer discrimination (Elson and Pearson 1981). The other school of thought sees it as female-led industrialization where women are included in the process and have much more input into decisions about work conditions than before (Safa 1995). They argue that with trade liberalization women in developing countries will benefit as they will be more likely to find employment, they will have access to market income, and they will have more control over their lives (Foo and Lim 1987).

Lowering barriers to trade and foreign direct investment has encouraged firms to search the global economy for the lowest paid labor in an effort to cut costs, and it is no accident that they have chosen to employ women, who historically have been the lowest-paid segment of the labor force. Governments have lowered labor standards and weakened workers’ bargaining power in an effort to attract foreign direct investment. This has made it possible for firms to employ labor on a temporary basis with no job security and very little bargaining power. In turn, women have accepted these terms of employment because they have no alternative. As mentioned before, many of them are displaced workers from the agricultural sector with no access to land. In addition, given the cutback in government expenditure on social services there is no safety net that these workers can rely on as they wait for a better job opportunity to come along.

Are they getting paid enough to raise them out of poverty? The answer is negative for most women. According to an income-based measure of poverty, of the 2.8 billion workers in the world in 2005, nearly 1.4 billion still did not earn enough to lift themselves and their families above the $2-a-day poverty line—just as many as there were 10 years ago. More than 70 percent of the poor are women. It is true that the number of people who earn less than $1 a day has declined, but given the record economic growth experienced by many developing countries, the progress on poverty reduction has been disappointing and agriculture is a special concern. Two-thirds of all people who survive on less than $1 a day live and work in rural areas.

Note that the income-based measure of poverty does not include other dimensions of poverty, such as access to water, health, and education. Also, it is based on household income rather than personal income and it assumes that all members of a household have equal access to household resources. In reality, women and men have very different access to household resources because they tend to have very different bargaining positions in the household. Several studies (Barrientos and Perrons 1999; Afshar 1998) have shown that when women participate in paid employment they tend to improve their bargaining position within the household. Therefore, in those cases where globalization created paid employment opportunities for women, it increased their bargaining power in the home. Their improved bargaining position resulted in increased expenditure on family nutrition, health, and education because women tend to spend more of their income on these things compared with men.

Impact on Work Conditions

Many studies have found that globalization has led to more uncertain work conditions for most workers. As economies grow, work is increasingly moving from the formal sector to the informal sector and workers are losing job security, benefits, and regulated work conditions. In many developing countries, the share of the informal sector has increased over the past few years. In nearly all developing countries women are much more likely to be in the informal sector than men. Not only are women more likely to be in the informal sector but they are also more likely to be concentrated in the most precarious forms of informal employment. A hierarchy exists within the informal sector, and women tend to be disproportionately represented in the lower segments of the hierarchy, which are characterized by low earnings and high risk of poverty.

To understand the link between globalization, informalization of the labor force, and female poverty one needs to understand the nature of informal work. Informal work is different from formal work along two important dimensions: place of work and nature of employment relations. As opposed to formal work, which tends to occur in clearly defined workplaces, informal work can occur anywhere. It can occur in the home, on the street, in unregulated factory spaces, at railway stations, in garbage dumps, on construction sites, and in many other unconventional places. Depending on the location, the informal worker is assuming risks of insecure and possibly unhealthy workplaces. They are also not assured access to infrastructure and security of tenure at the work site. Many female informal workers work from home, and studies (Carr et al. 1999) have shown that they tend to have lower bargaining power in the home and outside the home. They also have less of an opportunity to upgrade their skills, learn about market conditions, and organize collectively with other workers. Although it is true that home-based production provides flexibility in terms of moving between paid and unpaid work, it also perpetuates the gender gap in wages resulting from the gendered division of labor and responsibilities with regard to unpaid work.

Regarding the nature of employment relations, in the informal sector employment relations range from the very defined to the ambiguous. This means that in many cases the employment relations are so nebulous that these workers are not covered by standard labor laws. Following are the main types of informal employment relations:

  1. Owner operators of informal enterprises who employ others
  2. Owner operators of single person units who do not employ others
  3. Unpaid contributing family workers
  4. Unprotected/unregulated employees working for a formal enterprise, an informal enterprise or a household
  5. Casual laborers
  6. Industrial outworkers who produce on a subcontracting basis

Depending on the type of employment relationship, the worker could be completely autonomous or fully dependent on the employer and could assume a range of market risk. Industrial outworkers often work from home, and although they work on a piece-rate basis they have little or no control over the volume or timing of work orders, the quality of the raw material, or whether their output will be purchased by the contracting firm. Because there are no written contracts, the firm could choose not to buy the product after it has been produced, leaving the worker with significant risk of not recovering her investment of time and material costs. Informal workers are unable to bargain for better terms of employment because of the huge asymmetry of power and information between the transnational and the local producer. Globalization has created a highly dispersed production process where the decision maker at the top of the value chain has little or no contact with the outworkers who produce the final product.

The situation is even worse for women in the informal labor market. Studies (Beneria and Floro 2004) have found that women are paid significantly less then men even after controlling for age, education, and skill level. The gender wage gap, averaging about 48 percent in the informal sector, is typically much higher than the gender wage gap in the formal sector. In addition, women are far more likely to have seasonal or irregular work, which implies that there are days in the year when they have no paid work at all. Coupled with the fact that they earn very little on the days they do work, women are at constant risk of being in extreme poverty.

A look at a few case studies of informal labor market activities in different countries helps explain the variety of occupations and employment relations in the informal sector. In the garment industry in China, more than 70 percent of workers are young migrant women from rural areas who work under unregulated circumstances. Most workers are paid on a piece-rate basis, which means most of them work long hours to earn a decent wage. Many are supporting entire families back in their villages. Work conditions in the factories are often unhealthy, and workers are strictly supervised at work and at their dormitory-style living spaces. Similar conditions are found among garment workers in Bangladesh (Kabeer and Mahmud 2004). In the garment industry in Thailand, about 38 percent of workers work from home. They commonly have to pay for their own sewing machines, electricity, and materials.

Turning to street-vending occupations, the labor market is highly segregated by gender, and women tend to dominate in the lower-income trading activities selling mostly perishable fruits and vegetables. Most vendors buy their goods on a daily cash basis and most of them, especially women, have little or no access to credit. Globalization has raised the incomes of the educated middle class in most developing countries, which means middle-class workers have more disposable income and therefore could have greater demand for products and services sold by street vendors. On the other hand, globalization has also led to giant grocery store chains and food retail industries moving into these countries. Middle-class consumers might be spending much of their higher income on those products, in which case street vendors might be unable to compete and hence might be worse off.

The domestic work industry in most countries is a predominantly female occupation. Rising incomes in Hong Kong created an increased demand for domestic help. In 1995, there were 130,000 Filipina domestic helpers in Hong Kong. Studies have shown that most of the domestic workers in Hong Kong complained about long working hours with no overtime pay. Even though Hong Kong has a standard employment contract for foreign domestic workers to regulate the conditions of work and wages, the enforcement of these contracts has been weak in most cases. The high cost involved with challenging one’s employer deters most domestic workers from demanding their rights.

In conclusion, workers in the informal sector are predominantly women who are much more likely to be poor, have less access to infrastructure and services, face greater risk of seasonal unemployment with little ability to weather these contingencies in the form of insurance coverage, and have less access to financial, physical, and human capital assets. They tend to have little bargaining power vis-à-vis their employers, the government, or consumers of their products and services.

Women’s Self-Empowerment: Rays of Hope

It is very important to note that despite the enormous odds against which millions of women across the world struggle every day, there are many instances where they have come up with solutions and strategies for their own empowerment. Many of these are grassroots movements involving anywhere from a handful of women to millions of women. In all cases, solutions have involved collective action to achieve for greater balance of power. As a woman organizer in India put it: “Perhaps the most important effect of empowerment is that the woman says, ‘Now I do not feel afraid’” (Chen et al. 2005). Collective action has been able to increase wages, improve work conditions, pool resources, build social protection schemes, and influence policy at the local, national, and international levels. It has made women workers more visible and has given them more bargaining power in their personal and working lives. Organizations have been set up differently in different places depending on the needs and objectives of the group.

Worker cooperatives are an effective way of improving the economic position of a group of workers by pooling resources and information and sharing the gains of these combined resources. In Burkina Faso, the Organisation Nationale des Syndicats Libres has helped a group of women involved in sewing and soap production to form a cooperative and improve their health and economic conditions. Several waste pickers cooperatives have formed in many Latin American countries, such as Cooperativa Recuperar (1,000 members) in Colombia, Cooperativa El Ciebo (102 members) in Argentina, and Coopamare in Brazil. They work with city governments to provide recycling services to specific areas in the city. Many of these cooperatives provide their members with different forms of insurance. In Thailand, a group of 10 women produce garments on a piece-rate basis for transnational corporations. They pool their resources to buy equipment, get loans, access assistance from health services, and contribute to the Thai social insurance fund. Siyath is an organization of home-based coir workers in Sri Lanka. The group provides market information and serves as a liaison between buyers and producers in an effort to get a better price for their product.

Trade unions are another form of collective organizing by women. The Self Employed Women’s Association was the first trade union of informal workers anywhere in the world. It was formed in the 1970s in India, uniting street vendors and giving them a voice. It has 700,000 members organized in many smaller affiliated organizations. It aims at improving the lives of informal workers in the areas of employment, health, housing, education and training, childcare, leadership, and access to assets. It has also played a pivotal role in lobbying for policies that benefit informal workers, such as the National Policy for Street Vendors in India (2004). It has cofounded a number of national and international networks that support informal workers including the National Alliance of Street Vendors of India, Women in Informal Employment: Globalizing and Organizing, StreetNet, and HomeNet. Some other examples of women’s unions include the Interstate Movement of Babassu Coconut Splitters in Brazil, Union of Fish Vendors in Chad, and Red Thread Union of sex workers in the Netherlands. Their goals are specific to the needs of their members and range from fighting overexploitation of the coconut crop to protecting the economic interests of their members by increasing the price of fish to negotiating safe and healthy work conditions for sex workers.

Policy Implications

Given the overwhelming evidence one would have to agree that trade liberalization has increased inequalities of income between countries and within countries. Although there has been some reduction in income-based poverty, the evidence suggests that globalization has resulted in increasing numbers of workers working in unregulated, unsafe, and uncertain circumstances. Transnational corporations and government policies are largely responsible for this shift in employment conditions, but it is also true that more and more people, especially women, have been displaced from agriculture and have consequently entered the informal labor market with very few alternative means of survival.

One of the primary reasons for this displacement is agricultural subsidies given by developed countries and the lowering of trade barriers in agriculture by developing countries. The United States and the European Union are leading exporters of major staple crops, and agricultural exports from developed countries to developing countries have increased dramatically over the past 20 years. At the same time, subsidies for agriculture have also increased in developed countries. Developed countries spend approximately $1 billion a year on aid for agriculture in poor countries, whereas they spend $1 billion a day subsidizing agricultural overproduction at home. A very strong policy implication arising out of this analysis is that developed countries should stop providing agricultural subsidies to their farmers. They could divert these resources to provide training and support to displaced farmers and to improve education and research and development in high-tech products. It is true that this would lead to upheaval and change in the developed countries, but these countries are much better equipped to deal with structural changes. Currently, most of the upheaval is happening in developing countries that do not have the resources to provide the safety net necessary for protecting and transitioning people who lose their livelihoods. There are far fewer farmers in developed countries than there are in developing countries, which is why these subsidies are regressive and inefficient and lead to rising inequalities of income. Economic theory, research studies, empirical evidence, and policymaking bodies all endorse this policy recommendation that the agricultural subsidies must stop, and yet the world is held hostage by powerful farm lobbies in the United States and the European Union.

Another policy recommendation is for governments in developing countries to strengthen and enforce labor laws to safeguard the interests of the most vulnerable sections of the population. Women’s organizations can play a key role in promoting and lobbying for appropriate legislation and, more importantly, ensuring the enforcement of these laws. Globalization has clearly eroded labor laws in many countries. For the poor, labor is their only productive asset. It is imperative that the world community protects labor not exploits it.


In conclusion, globalization has benefited a few but harmed many. Although it is true that the few who have benefited have gained more than the many who have lost, most countries have not created adequate mechanisms to compensate the losers. This has led to rising inequalities of income that can only be corrected by providing safety nets for the poor; improving access to education and health services for men, women, and children; removing barriers for small farmers and businesses to succeed and participate in the world economy; strengthening labor laws; and dismantling agricultural subsidies.

Women work longer hours than men and yet are more likely to be poor. They are told that to escape poverty they must participate in paid employment and yet they are not relieved of their caretaking and domestic responsibilities. Women produce most of the food in developing countries but are more likely to be malnourished. Even so, they are already doing their part by organizing and raising their voices to correct the uneven balance of power in the world between the rich and the poor, men and women, citizens and governments, and workers and employers. It is about time the rest of the world did its part.