The high levels of consumption enjoyed by the rich countries of the global North are only possible thanks to the massive appropriation of labor from the population of the global South. This is evidenced by research by the Institute of Environmental Science and Technology (ICTA-UAB) which indicates that this appropriation occurs through unequal exchange in international trade and global commodity chains.
The new study published today in Nature Communications calculated the flows of labor incorporated into goods traded worldwide between the years 1995 and 2021.
The results show that, in 2021, the global North imported 906,000 million hours of embodied labor from the South, while exporting only 80,000 million hours in return. That is, for every hour of work that the global South imports from the global North, it must export eleven hours to “pay for it.” As a result, countries in the global North appropriated 826 billion net hours of work from the global South, at all skill levels and in all sectors: mining, agriculture, manufacturing, and services. This figure of 826,000 million hours is the equivalent of more work than that done by the entire workforce of the United States and Europe combined.
The wage value of this net appropriation workforce is equivalent to €16.9 trillion in 2021, according to prices in the countries of the global North. In other words, this is what the appropriate labor would cost if it were paid at prevailing wages in the North, with equal pay for equal work. “The numbers are staggering and show that, every year, there are very significant amounts of value flowing from South to North,” says Jason Hickel, a researcher at ICTA-UAB and the Department of Anthropology at UAB. “The global North enriches itself by diverting value from the South,” he adds.
Unequal exchange occurs because of systematic price inequalities in the world economy. States and powerful companies in the global North are trying to contain wages and supply prices in the global South in order to obtain cheaper inputs and other goods. Producers in the global South are then forced to export more goods and services in order to buy a certain level of imports.
This translates into large net transfers from the global South to the global North, which benefits businesses and consumers in the North, but extracts from the global South the productive capacities necessary for their development. “Labour that could be used to enhance human development in the global South is instead used to serve capital accumulation in the global North,” said co-author Morena Hanbury Lemos, also from ICTA-UAB, who said: “This is one of the main drivers of deprivation in the South and needs to be addressed.
According to the study, wages in the global South are 87% to 95% lower than those in the North for jobs of equal qualification, and between 83% and 98% lower for jobs of equal qualification within the same sector. Wage inequalities are so extreme that the highly skilled workforce in the South receives only one-third the wage of the low-skilled workforce in the North.
Net labour accounts for about half of total consumption in the global North. This means that, if this unequal exchange did not occur, consumption in the North would decrease by 50% or workers in the North would have to double their working hours to compensate for it.
According to the study, workers in the South provide 90% of the workforce that drives the global economy, but the benefits of this work accrue disproportionately in the global North. Workers in the South receive only 21% of the world’s income. “People tend to assume that the South provides low-skilled labor in agriculture and mining, in exchange for highly skilled labor in the manufacturing and service sectors of the global North. But that’s not how it works in the contemporary global economy,” says co-author Felix Barbour of the Beijer Institute for Ecological Economics at the Royal Swedish Academy of Sciences. “In reality, the South provides most of the workforce at all skill levels and in all sectors. In fact, the global North net appropriates more highly skilled labor from the global South than it gets from North-North trade.”
To overcome this problem, researchers indicate that countries in the global South need to resort to industrial policy to reduce their dependence on imports from the global North and remobilize their productive capacities around what is most necessary for human needs and national development goals.
Reference
Hickel J., Hanbury Lemos M., Barbour, F. Unequal Exchange of Labour in the World @conomy. Nature Communications, 29 July 2024.
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ABOUT THE AUTHORS
Jason Hickel is an economic anthropologist, author, and a Fellow of the Royal Society of Arts. He is Professor at the Institute of Environmental Science and Technology (ICTA-UAB) at the Autonomous University of Barcelona (UAB), Visiting Senior Fellow at the International Inequalities Institute at the London School of Economics, and Chair Professor of Global Justice and the Environment at the University of Oslo. He is Associate Editor of the journal World Development, and serves on the Climate and Macroeconomics Roundtable of the US National Academy of Sciences, the advisory board of the Green New Deal for Europe, the Rodney Commission on Reparations and Redistributive Justice, and the LancetCommission on Sustainable Health.
Morena Hanbury Lemos is a doctoral candidate in Ecological Economics at the Institute of Environmental Science and Technology (ICTA-UAB), Autonomous University of Barcelona (UAB), Spain. She obtained a master’s degree in Political Ecology, Degrowth, and Environmental Justice from UAB, a master’s in Decolonial Thought and Humanities, and a bachelor’s in Environmental Management from the University of Sao Paulo (USP), Brazil. Her research focuses on how colonial patterns are perpetuated in the global economy, including the analysis of unequal exchange between formally colonised and colonising countries. She investigates public policies that can promote economic sovereignty, decolonisation, and the reorganisation of resources and labour to sustainably meet the needs of the populations in the Majority World. For her, degrowth is a response to the demands for justice from the historical anti-colonial, environmental, and social movements of the South.
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