SAJC Cl 1.2 Lec 14 Notes: Role of Labour in Governing Global Economy –Relative Role of Key Actors II

St. Andrew’s Junior College H2 Cluster 1: Development, Economy and Environment H2_DEE_lecture14_2025/pg 1 Lecture 14 Relative Role of Actors in Governing the Global Economy (II): Role of Labour KEY QUESTION: Can labour influence economic activities? With the completion of this lecture, attached readings and tutorial, you should be able to discuss the: - influence of labour characteristics on TNCs’ locational decisions; - influence of labour unions on TNCs and states; and - influence of TNCs and states on labour. Lecture Outline 14.1 Introduction 14.2 Influence of Labour Characteristics on TNCs’ Locational Decisions 14.3 Influence of Labour Unions on TNCs and States Box 1: Financial Performance at Amazon and Fedex, Versus UPS Demonstrates The Value Unions Can Bring – case study Box 2: Tripartism in Singapore 14.4 Influence of TNCs and States on Labour 14.4.1 Regulation of Labour by State Box 3: Attracting Global Talents to the United States - case study 14.4.2 Impact of TNCs on Labour 14.5 Concluding Remarks Bangladeshi garment workers lobbying for higher minimum wages in 2023 Once every five years, the Bangladeshi government revises the minimum wage. The current minimum wage, set in 2018, is 8,000 taka, or $121 a month. The proposed 2023 revision was to 12,000 taka, or $181; less than half of what unions say a living wage would be. A living wage is the theoretical income level that allows individuals or families to afford adequate shelter, food, and other necessities. The clashes echoed past protests over minimum wage increases in 2013 and 2018. Workers demanded an increase that factory owners said they could not afford, and tense negotiations ensued that ultimately boiled down to economics dictated by companies not in the room: fashion brands that express support for decent wages but won’t pay more for the products they ask factories to make. That’s the widespread consensus among union organisers and labour researchers who followed the events in Bangladesh, which is the second-largest garment-producing country in the world but pays among the lowest wages in the industry. The effective government of the global economy entails that workers work in safe conditions and can expect regular payments of a fair wage for their labour. The garment workers protests showcases the complexities in governing the global economy. To what extent does labour play a role, vis-à-vis more powerful actors such as TNCs and the state?

St. Andrew’s Junior College H2 Cluster 1: Development, Economy and Environment H2_DEE_lecture14_2025/pg 2 14.1 Introduction • In Lect 12, we learnt that TNCs re-organise their operations between locations on an international or even a global scale. • Like all firms, TNCs re-organise to maximise profit and reduce losses. • As one of the factors of production (the others being land, capital and entrepreneurship), labour plays a role in determining where TNCs