Are Multinationals the Problem? A Debate

No.

Multinationals investing in developing countries largely take existing labor market conditions as given.

They do not create such observed features of women's employment as low wages and high labor turnover. If anything, multinational export factories pay higher wages and have better working conditions than alternative domestic occupations open to the women who work in them, particularly than indigenous competitors in laborintensive export industries. The increased demand for female labor generated by multinational factories raises prevailing market wages and increases employment opportunities for women, such that the multinational is frequently accused in the same breath of paying wages which are "too low" for workers and "too high" for indigenous employers to match.

Even where the wage in multinational export factories is lower than domestic alternatives-such as prostitution in Thailand, rubber tapping in Malaysia, and domestic service in Singapore-it is frequently a preferred form of employment among women, because of better status and working conditions. Because of institutionalized seniority wage increases, as well as mandated fringe benefits, in formal factory employment, wages for long-term workers are often higher than in informal service sector jobs, wage-labor in export agriculture, and other unskilled and semiskilled male or female occupations.

In any case, low wages are only one and not necessarily the most important factor influencing the decisions of multinational export factories to locate in a country. In Southeast Asia, for example, the earliest and still most popular offshore sites for labor-intensive multinational factories were Hong Kong and Singapore, whose prevailing wages are and have remained much higher than those of neighboring countries which have been equally if not more welcoming to multinationals. These other costs and considerations include location, infrastructure, and local political and economic conditions.

Moreover, political repression, military rule, U.S. aid, and authoritarian capitalism-though in some (not all) cases correlated with (not caused by) multinational investment in labor-intensive export manufacturing-are neither necessary nor sufficient for this type of investment, or for the economic success of the countries which host it.

If multinationals are not-directly, by lowering wage levels, or indirectly, by influencing host governments to be repressive of labor-responsible for the low wages of women workers in developing countries, who or what is?

The primary cause of women's weak labor market position in developing countries is the weak and underdeveloped nature of their national economies, resulting in weak labor demand. It is this weak development of productive forces - whatever its causes-which results in a large (as much as tenfold or more) national wage difference between developed and developing countries. This is much more important that the sex wage difference within the developing country, which is about half to one-third, and which is a secondary cause of low wages in multinational factories. This sex wage difference reflects female subordination and the sexual division of labor in indigenous society, particularly the constraints of the female/mother role which results in the short job tenure, low seniority, and hence low average wages of women workers. In these as in other predominantly female occupations, women quit when they marry and have children. Neither the national or the sex wage difference is the specific responsibility of these multinationals, though they take advantage of and in some cases may even reinforce them.

A widely accepted criticism of multinationals argues that the wages paid in multinational export factories are so low that they are insufficient to cover in some cases even the minimum physical subsistence of workers employed in very intensive tasks, so they become quickly "exhausted." But the evidence in the literature itself shows that not only do the vast majority of workers cover their own physical subsistence and basic needs of food, housing, clothing and transportation, they have enough left over for small luxuries, savings, and contributions to their families.

As for "exhaustion," there is no evidence that either hours worked or the intensity of work in multinational export factories are greater than in equivalent unskilled or semi-skilled female occupations in the developing host country. Health hazards are probably worse in multinational factories because of the use of chemicals and machinery in modern industrial technology.

High labor turnover, sometimes deduced as "evidence" of "exhaustion," in fact reflects the influence of the sexual division of labor in indigenous society, which assigns women full responsibility for the family and household role. Most of the women workers who quit multinational export factories do so not because they are physically or mentally exhausted-with the possible exception of new recruits who are both paid lower "probationary" wages and are less used to the type of labor required-but rather to marry and have children. Few quit to look for other, presumably less "exhausting" jobs. There is also no evidence that women factory workers retire sooner than women in other predominantly female occupations, such as self-employment or family labor which can often be more flexibly scheduled. Rather, the evidence suggests that employment for women in multinational export factories prolongs their working life and delays marriage and child-bearing-presumably because it is less compatible with family responsibilities than more flexible traditional women's occupations.

What about the security of employment, given all that is said about the "footlooseness," and "runaway" behavior of export industries? The evidence indicates that so far at least-and in some countries this is as many as ten or twenty years-multinational footlooseness among developing countries is much less common than a few highly-publicized cases might suggest. When firms do relocate, this is usually due to reasons other than the commonly cited rising wages or expiring tax holidays-for example, corporate takeover or reorganization of the parent company, business failure of the company or of a particular division of product-line, or extreme political and economic insecurity in the host nation.

Whereas multinationals may use their potential or actual mobility to discipline workers in their developed home country, in developing countries they are just as likely to emphasize that they are "here to stay" and to publicize reinvestments as a sign of their commitment to the host country-if only to win favor with the host government and perhaps to obtain more tax concessions.

Layoffs, pull-outs, and plant shutdowns are no more frequent among multinational than among indigenous export factories-which are if anything more vulnerable to recessions and more likely to shut down from business failure. They merely attract more attention because multinational subsidiaries are much larger than local firms.

From a global viewpoint, more jobs have probably been created in developing countries, where production is more laborintensive, than have been lost in developed countries as a result of relocation. There is also a positive shift in income redistribution, since employment has shifted to the poorest workers in the world-women in the Third World, whose income and employment opportunities and access to public social security support are far inferior to those available to displaced workers in the developed countries. There is no reason why Third World women should be denied jobs which workers in the developed countries either refuse to do, or are so keen to preserve for themselves, and which are better than other women's jobs in the Third World. Employment created for women is also no less valuable than employment created for men.

Multinational employers are frequently accused of using psychological manipulation and cultural indoctrination to control workers and keep them weak and unorganized. Multinationals do indeed engage in various devious labor practices. But it should be noted that workers often support, enjoy, and themselves initiate the organization of such "Western bourgeois feminine" cultural activities as fashion and make-up classes, beauty contests, and formal dinners with ballroom and disco dancing. "Factory culture," and factory workers' tastes and aspirations are little different from the pervasive urbanmodern culture and other young women's aspirations in the indigenous society beyond this sector.

Further, any cultural indoctrination by multinational employers has not been successful in buying workers' complacency. Women workers in these factories are in many cases highly organized-often with rates of unionization surpassing those found elsewhere in the host or even the home economy. They recognize exploitation, and especially in repressive states like South Korea and the Philippines, are militant, radical, with strong grassroots organization, and frequently initiate labor actions such as go-slows, sit-ins, and strikes, even where they are forbidden and punishable by law.

What is the impact of multinational factory employment on women's position in the family and indigenous society? It has been argued that this employment does not offer women in the Third World more than an at best temporary, superficial, and illusory liberation from male domination in their own families and societies, and may even reinforce such domination. However, it does improve their lives-increasing their freedom, independence, worth, status, contribution to family support, and access to experience outside the family, to small luxuries, and the companionship of other women-all of which are highly valued by the women themselves. It also enables young women to delay marriage and childbearing, and to choose their own marriage partners. As more women continue working after marriage, the traditional sexual division of labor within the family changes. Working wives and husbands increasingly share the power and responsibilities of housework, childcare and family financial decision-making.

Export factory employment accounts for only a small proportion of female wage employment in developing host countries, even within the urban-industrial sector alone. In fact, in quantitative terms, multinational export manufacturing in the Third World is a phenomenon of small significance for multinationals, for export manufacturing, for developing countries, and for women, and hardly qualifies as a major new international division of labor.

In sum, I argue that the actual experience of multinational export manufacturing in the Third World is a more complex one than most critics have acknowledged with the Third World state, Third World capital, Third World women workers, the Third World domestic economy, and Third World indigenous patriarchal systems having a more autonomous and important role to play in determining the occurrence, form, and impact of this multinational investment and employment.

The phenomenon of multinational employment of Third World women in export factories can be, and, the evidence suggests, in many cases is progressive, both in the Marxist sense of furthering class consciousness and in the feminist sense of weakening female subordination and the sexual division of labor in indigenous Third World societies. Third World women workers both benefit from their employment in multinationals, and use it to organize themselves and take action as a class against capitalist exploitation. Far from being pushed into society's margins by their employment, they are integrated into the modern industrial workforce more than other women, and than most men, in the host country, and in some cases may even function as a progressive "vanguard."

This view implies a shift away from the common belief among progressives that multinational export manufacturing should be prevented or removed from the Third World. This is an inherently unprogressive strategy if it takes place in the absence of offering concrete alternatives for women's employment for it will undermine women's already tenuous economic position, remove a focal point for organizing workers against corporate power in general and multinational corporate power in particular, and reinforce indigenous patriarchy by yielding to the pressures of conservative groups-such as fundamentalist male religious leaders-in the Third World who are opposed to women's employment outside the home, especially in foreign factories which might expose them to sexually liberating alien cultures.

This does not mean that no improvements can or should be made in the position of Third World women workers in multinational export factories, only that they should be attempted in the context of three interrelated progressive struggles. The first is a struggle to develop the national economy and create more jobs for both men and women-including by means of socialist revolution if that is historically appropriate, and bearing in mind that socialist countries like China also can and do host labor-intensive export-oriented manufacturing industries. The second is a struggle to enhance workers' consciousness, organization, and action, and to improve their wages and working conditions, especially health and safety conditions-which is already going on in multinational export factories. The third is a struggle to reduce sexual inequalities in the ideological superstructure and production relations of indigenous society and economy; this struggle is currently the weakest of the three.

Labor-intensive export manufacturing by multinationals is not the best or the only context in which these national, class and feminist struggles can or should proceed, but neither is it the worst or the most important. Wittingly or unwittingly, directly or indirectly, actively or passively, the multinational may well have a progressive role to play in these struggles, depending on specific local historical conditions. Women workers in the Third World already recognize and exploit the contradictions and the progressive aspects of their employment by these multinationals-a reality which radical and feminist critics ignore at the peril of being, not only wrong, but irrelevant to the cause of those they would champion. O

Linda Lim, a researcher associated with the Center for South and Southeast Asian Studies at the University of Michigan in Ann Arbor, is currently in Singapore. This article has been excerpted from a paper, "Multinational Export Factories and Women Workers in the Third World: A Review of Theory and Evidence," presented by the author at a conference organized by the Center for the Study, Education, and Advancement of Women at the University of California, Berkeley in April 1983. The full length version of the paper will be published in a volume of conference proceedings.

Yes.

The value of Lim's thesis consists principally in its attempt to right the imbalance in those analyses that attribute more power and influence to multinational corporations than they actually possess, and virtually no power to Third World governments and the women employed by multinationals. But, while recognition of the control Third World women workers possess both individually and collectively over their work lives is long overdue, the extent of and limits to that control must also be acknowledged.

1. Labor repression

In many developing countries, export manufacturing firms enjoy the protection of repressive labor legislation and strict governmental control over union activities. Third World governments frequently justify such measures by the need to contain a threat to internal security and, in a perverse sense, that explanation may be plausible. These governments have staked their credibility on the success of export-oriented industrialization. The linchpin of that strategy remains cheap, docile labor. Thus any attempt by workers in export industries-who are, of course, mostly women-to obtain higher wages and better working conditions is a threat to the political regime. Only by understanding this does the decree issued by the Philippine government last year make sense; that decree banned strikes in the semiconductor industry on the ground that the industry is vital to the "national interest" (see MM, Sept. 1982).

2. Capital mobility

Export manufacturing multinationals may use both the promise of further investment and the threat of withdrawal as inducements to host country governments to maintain a favorable investment climate. Even if infrequently acted upon, the threat remains especially credible since export manufacturing multinationals are not bound to any specific location for reasons of market access or access to raw materials.

When the Malaysian government permitted the formation of a union for electronics workers earlier this year, one major U.S. electronics firm hinted that it might choose to expand elsewhere. When workers at Control Data Corporation in South Korea protested the firing of six union members last year and occupied the factory, the management closed the plant and left Korea (see p. 12). Atari's February 1983 announcement that it was moving parts of its California production lines to Hong Kong and Taiwan must be seen in this light as well.

In a further example, an increasing number of young women working in export factories on the Mexican border have received organizing training at a local labor education center. So a number of firms have begun to hire much older women who have not been exposed to the center's ideas. Thus, multinationals are not wedded to fixed ways of behaving, but are adaptable to changing circumstances.

We agree that the experience shared by both Third World women and their counterparts in the advanced capitalist countries of working outside the home in wage employment may in certain respects be liberating. To the extent that the traditional social relations in many Third World countries can be characterized as "feudal," Third World women may experience an even greater sense of liberation than those in advanced capitalist countries. The financial freedom of having one's own income as well as the widening of one's circle of social contacts are generally regarded as positive consequences of factory employment.

In the context of a patriarchal and feudal society, however, workers may continue to view their work experience through the refracting prism of traditional societal values. Far from developing a feminist or class consciousness, women workers may feel a sense of gratitude and indebtedness to their employers for providing them with a paying job.

In this sense, Lim is correct in stating that the effect of factory employment on Third World women's consciousness is strongly conditioned by the broader social, political, and economic context in which that employment occurs. It seems highly likely that a woman factory worker's attitude toward her work will be different in a labor-short economy like Singapore than in a labor-surplus economy like the Philippines. In the former, she may very well be only a secondary wage earner in a family in which one or more other family members also have full-time employment. In the latter it is frequently the case that the woman factory worker is the sole regular wage earner. By implication, the woman factory worker is apt to be less concerned not only about her wages but also about the security of her employment in the former than in the latter.

Similarly, the differing political conditions in countries like Singapore and the Philippines have an important effect on women's perceptions of their work experience. In Singapore, the government has effectively depoliticized the labor force and the society as a whole through comprehensive social legislation which has distributed through virtually all levels of society some of the benefits of rapid economic growth. Not only has the Philippine economy shown lackluster performance in recent years, but what growth has occurred has definitely not "trickled down" to the working classes. On the contrary, the average factory worker's real wages have declined sharply over the last decade of export-led growth.

Small wonder then that women workers in the Philippines have proven more receptive than their Singaporean counterparts to radical analyses of their economic and social problems.

Still, even a society like Singapore is not immune to political upheaval. The government's ability to "buy" labor and social peace in the future will depend critically on its success in continuing to attract foreign investment and sustain high rates of economic growth as it shifts its industrial strategy from a labor-intensive to a capital- and skill-intensive one. If the gamble on high tech growth should not pay off, the government may no longer be able to finance its policy of labor cooptation. Should severe unemployment and wage cuts affect the domestic labor force, industrial sabotage could well occur in the absence of alternative avenues for expressing worker dissatisfaction.

In sum, Lim has stressed the importance of specific historical, economic, political, and cultural circumstances in conditioning the relationship between Third World women workers and their multinational employers. While agreeing with its spirit, we seek to temper the discussion of the "liberating" potential of the work experience of Third World women with an appreciation of the constraints imposed upon their individual and collective actions by the nature of the firms for which they work and the global system in which those firms compete. Similarly, we seek to illustrate how host country governments, while motivated by concerns broader than the service of corporate investors, are nonetheless constrained to pursue policies tailored to the needs of those investors. The political legitimacy, or even the stability, of regimes may hinge on the fate of export-led industrialization. To those regimes, survival requires the subjugation of women workers' interests to those of multinational corporations.

David O'Connor is an economist specializing in Southeast Asia development. Chia Siew Wong is a Singaporean research consultant. Both have worked as consultants to the United Nations Centre on Transnational Corporations.