Ann E. Harrison

Over the past two decades, the percentage of the world’s population living on less than a dollar a day has been cut in half. How much of that improvement is because of—or in spite of—globalization? While anti-globalization activists mount loud critiques and the media report breathlessly on globalization’s perils and promises, economists have largely remained silent, in part because of an entrenched institutional divide between those who study poverty and those who study trade and finance. Globalization and Poverty bridges that gap, bringing together experts on both international trade and poverty to provide a detailed view of the effects of globalization on the poor in developing nations, answering such questions as: Do lower import tariffs improve the lives of the poor? Has increased financial integration led to more or less poverty? How have the poor fared during various currency crises? Does food aid hurt or help the poor? Poverty, the contributors show here, has been used as a popular and convenient catchphrase by parties on both sides of the globalization debate to further their respective arguments. Globalization and Poverty provides the more nuanced understanding necessary to move that debate beyond the slogans.

"During the 1990s, human rights and anti-sweatshop activists increased their efforts to improve working conditions and raise wages for workers in developing countries. These campaigns took many different forms: direct pressure to change legislation in developing countries, pressure on firms, newspaper campaigns, and grassroots organizing. This paper analyzes the impact of two different types of interventions on labor market outcomes in Indonesian manufacturing: (1) direct US government pressure, which contributed to a doubling of the minimum wage and (2) anti-sweatshop campaigns. The combined effects of the minimum wage legislation and the anti-sweatshop campaigns led to a 50 percent increase in real wages and a 100 percent increase in nominal wages for unskilled workers at targeted plants. We then examine whether higher wages led firms to cut employment or relocate elsewhere. Although the higher minimum wage reduced employment for unskilled workers, anti-sweatshop activism targeted at textiles, apparel, and footwear plants did not. Plants targeted by activists were more likely to close, but those losses were offset by employment gains at surviving plants. The message is a mixed one: activism significantly improved wages for unskilled workers in sweatshop industries, but probably encouraged some plants to leave Indonesia"--National Bureau of Economic Research web site.

"Critics of globalization claim that firms are being driven by the prospects of cheaper labor to shift employment abroad. Yet the evidence, beyond anecdotes, is slim. This paper focuses on the labor market decisions of US multinationals at home and abroad for the years 1977 to 1999. Using firm level data collected by the US Bureau of Economic Analysis (BEA), we separately estimate the impact on US manufacturing employment of affiliate activity abroad, imports and exports within multinational firms, and technological change. We begin by reporting correlations between US multinational employment at home and abroad. Evidence based on the operations of US multinationals suggests that the sign of the correlation depends upon the crucial distinction between affiliates in high-income and low-income countries. US employment and employment in low-income (high-income) countries are substitutes (complements). The complementarity is driven by an overall contraction in manufacturing employment both in the US and in affiliates based in high-income countries. We then develop an empirical framework which allows the firm to determine employment at home and abroad simultaneously. Using a variety of different theoretical approaches to estimating labor demand and a range of econometric techniques, we find that employment in low income countries substitutes for employment at home. Employment in high income affiliates, however, is generally complementary with US employment. Second, US capital investments in both high and low income affiliates are associated with lower employment in the United States. Finally, our results show that other factors have made important contributions to falling manufacturing employment in the United States, including technological change and import competition. Taken together, our results suggest that concerns over the impact of globalization on US jobs are grounded in reality"--National Bureau of Economic Research web site.