[OPE-L:1390] Re: international value

glevy@acnet.pratt.edu (glevy@acnet.pratt.edu)
Fri, 8 Mar 1996 21:38:23 -0800

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A brief response to Patrick, whose post [OPE-L:1388] I thought was very

The question I posed before was whether the wage differentials of workers
in the same branch of production who are located in different countries
are attributable to productivity differentials (as Paul C suggested before
he subsequently qualified his response).

I believe they are not. Higher productivity for workers in a particular
region *only* creates the *potential* for higher wages. Whether actual
wages rise alongside productivity is another question.

To illustrate this point consider the following realistic scenario. Let's
say that Ford Motor Company has five assembly plants in five cities
(e.g. Dearborn, Madrid, Rio, Seoul, and Capetown) in five separate
countries (i.e. US, Spain, Brazil, Korea, South Africa) all building the
same model car. The technology used would generally be identical although
there would almost certainly be different degrees of labor
intensification in the five plants. So, except for labor intensity, we
could say that the average productivity is the same in all of those

Will the wages be the same? I think NOT. Why is this? Wage rates for the
workers in the different locations will depend on such factors as local
labor market conditions and the prevailing wage for similar occupations,
the size of the relative surplus population in each region, the degree
of bargaining power and unionization of workers, etc. This is something
that transnational corporations, of course, are quite aware of and use to
their advantage. In the absence of international trade union organization
and solidarity (e.g. co-ordinated bargaining of workers in different
countries working for the same firm -- unfortunately, a rare occurence),
the firm will pay workers in, for instance, the Rio plant based on
factors described above in Rio rather than offer them comparable wages to
the workers at the Dearborn plant. So, consequently, I would say that it
is very misleading to believe that wage increases will follow productivity
increases particularly in cases where there is neither a skilled
occupation nor a labor market shortage of available workers.

In OPE-L Solidarity,