Social Upgrading in Mobile Phone GVCs: Firm-level Comparisons of Working Conditions and Labour Rights

In developing countries, more and beffer jobs have been a key goal of economic development based on the integration of local firms and workers into global value chains (GVCs). As global production is increasingly organized by multinational lead firms through a dense web of inter-firm relationships across national boundaries, the participation of local producers in GVCs is widely considered to be an effective way to create new employment, generate incomes, and therefore reduce poverty in developing countries. Such optimism is premised on the expectation that, as firms and countries move up the value chain into high value-added activities through varied forms of economic upgrading, workers will benefit through higher wages and beffer working conditions. In other words, economic upgrading is expected to lead to improved workers’ conditions and entitlement in GVCs.

Over the last several years, however, there has been a growing concern about the disjuncture between the gains from GVC integration and economic upgrading, and what is captured by workers and their families and communities surrounding them (Barrientos et al., 2012; Posthuma and Nathan, 2010). This concern has been reinforced by a growing body of evidence and a plethora of news reports and public exposés showing that workers in developing countries catering to global buyers, from Chinese electronics workers to Bangladeshi apparel workers, are not given a fair share of the gains from export growth. This has prompted GVC researchers to propose the concept of social upgrading, which entails an enhancement of the quality of employment and working conditions and an improvement in the rights and entitlements of workers (Barrientos et al., 2011). The Capturing the Gains research program has been a notable effort to examine the conditions under which economic and social upgrading in GVCs might be combined.

Building upon this effort, our study aThempts to investigate the relationship between economic and social upgrading by comparing labour conditions at the firm and factory levels in mobile phone GVCs.