Emily Apperson
Shimko Chapter 8
What to do about the “race to the bottom?”
December 6th, 2012
Introduction to International Relations
POSC 102 002
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The concept of globalization has slowly made its way from academic to popular
thinking about international relations. The term “globalization” refers to the
multifaceted social, cultural, technological, economic, and political processes that
are slowly merging the world into a larger global society. The major point of
disagreement is the effect of globalization on the ability of governments and
communities to shape their own destinies. The people that are convinced
globalization is real say that technology is reducing the importance of geographic
location and making the world map increasingly borderless. This reduction of
geographic location importance leads to power being shifted away from nations and
governments and shifted towards MMC and other global market forces. This is
where the term “race to the bottom” comes in. The “race to the bottom” is when
wages, regulations, and social welfare programs are reduced as MMCs search for
places with low wages, low taxes, etc. Skeptics of globalization say that the world is
not becoming borderless and contrary to the “race to the bottom” theory; most of
the corporate investments are in countries with high wages, numerous regulations,
and high taxes. So the two basic questions are: are we seeing the emergence of a
single global society? And if so is this development beneficial or harmful? Realists
tend to be the skeptics of globalization; they say that we are not seeing the
emergence of a single global society. Liberals on the other hand tend to say that a
single global society is emerging and it will make the world more balanced so it’s
good. Lastly, Marxists tend to agree with the liberals on the fact that a single global
society is emerging, but disagree on the fact that they think that a single global
society is not a good thing and will turn out to be harmful in the long run.
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In the Shimko book1, two arguments are given displaying the two different
opinions of globalization and the “race to the bottom’. The first article, “Vietnam is
the New China: Globalizations Victors Hunt for the Next Low Wage Country”, by
Alexander Jung and Wieland Wagner2 argues for the realist and Marxist side of the
argument that globalization is not a good thing; saying that the “race to the bottom”
is real and that china is a major force driving the “race to the bottom”. The second
article in the Shimko book, “A Strategy to Promote Healthy Globalization”, by
Lawrence Summers3 tends to argue more towards the liberal side saying that
globalization is happening and it can be beneficial if it is regulated and done in the
right way.
The argument against globalization has a lot to do with workers rights and fair
wages. A lot of companies outsourced jobs to China because labor was cheap. This
not only put American’s out of jobs, but also supported the unfair labor standards
and extremely low wages that workers received in China. In the Shimko Point of
View article, Alexander Jung and Wieland Wagner point out that the financial
advantages to outsourcing jobs to China have been slowly vanishing. China used to
have low wage migrant workers but now that the workers are not as desperate
people want better wages and don’t want to migrate as far to find work. The title of
the article makes it clear that the trend of globalization will not just stop with China
raising their wages or demanding more because a new China is already emerging
from behind the scenes to take its place.
China’s downfall as the cheap exporter of the world is well described by Anita
Chan in her article, A “Race to the Bottom”: Globalization and China’s Labor
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Standards4. Chan quotes William Greider, an observer, when he says “In the race to
the bottom, China is defining the bottom”. There has always been an enormous gap
between the minimum wage in the United States and the minimum wage in
developing countries in Asia and Central America. This is why most of the labor-
intensive industries are now based out of third world countries, because they can
hire the same low skilled workers for less money and therefore make a greater
revenue. Even though China and other third world countries like China have a set
legal minimum wage, this minimum wage cannot support a family and really isn’t
enough to live off of. The minimum wage is supposed to be about 40-60 percent of
the average wage in each locality. The Chinese minimum wage was often found to
violate by large quantities, such as in 1999 the minimum wage was only 23 percent
