The Conversation is running a series, Class in Australia, to identify, illuminate and debate its many manifestations. Here, Joy Murray and Ali Alsamawi examine how social footprints can add to our understanding of how inequality-implicated commodities move around the world.
According to a widely publicised Oxfam report released during January’s World Economic Forum, 85 people control the same amount of wealth as the bottom half of the world’s population. This means that a handful of people appropriate the lives of the many who provide them with goods and services to support their lifestyles.
While headline figures like this are confronting, we actually know a lot more detail about this. We know just how labour is exploited, where goods are produced and where they are sold, who depends on the labour of others and who exports labour embodied in the goods they produce for others.
The process of mapping this out is called global social footprinting. The Integrated Sustainability Analysis group at the University of Sydney has recently published a paper entitled The Employment Footprint of Nations Uncovering Master-Servant Relationships. This work reveals, for example, which countries are net importers of employment (relying on others to maintain their lifestyles), and which are net exporters, who work predominantly to support the lifestyles of others.
Results show millions of labourers around the world work purely to maintain other nations’ lifestyles. For instance:
In Australia, in 2010 more than 11 million workers from outside the country were working for this cause, while the total Australian workforce was about ten million.
The full-time labour of 200 million workers is embodied in exports from China and India alone.
Some 70 million workers outside the United States support the lifestyle of US citizens.
When this inter-country inequality is coupled with information about intra-country inequality it can reveal some stark realities. For example, about 40 million of those supporting the US lifestyle are from countries with high inequality. Textile workers in Bangladesh, who work for the export market, are paid one-quarter the wages of Bangladeshi workers who produce goods only for their own country.
This is important information for global organisations intent on improving their social bottom line because it provides a reliable and relatively inexpensive way to pinpoint possible areas for action. It is also useful to organisations such as Fairtrade International, by providing them with detailed information that can be used to promote ethical consumption.
The stories supply chains tell
Global social footprinting uses a technique called multi-regional input-output (MRIO) analysis. This provides a quantitative, consistent and rigorous method to calculate some of the social consequences of doing business.
Until the development of MRIO it would have been impossible to follow these global supply chains. There was no way to track the millions of data points needed to reveal exactly where labour is exploited; where goods are produced and sold; who depends on the labour of others; and who exports labour embodied in the goods they produce for others to use.
Multi-regional input-output analysis lays bare supply chains that snake around the world. Every supply chain carries with it embodied and previously hidden information like who gets paid what for their work.
A relatively short supply chain serves as example. The French (average wage US$58,000) smoke cigars made in Poland (average wage US$10,000), which in turn relies on raw material produced in Tanzania (average wage US$170).
While this alone does not necessarily indicate inequality because it says nothing about purchasing parity, such information makes it hard for companies involved in this industry to hide behind a plea of ignorance. It uncovers a likely hotspot, a starting point for further investigation of the state of within-country equality.
A powerful tool
Such investigation reveals that high-equality countries like Norway rely on labour from countries that often have high inequality. This does not mean Norway should stop importing from such countries. However, it illuminates where exploitation exists within a supply chain and provides information that can be used to pressure businesses and governments to reduce it.
Used in conjunction with the income footprint this makes for a powerful tool. The global income footprint lays bare some surprising discrepancies between domestic average salaries and those paid along the supply chains of a nation’s imported goods and services. For instance, the average domestic wage in Japan in 2010 was US$53,000; the wage of foreign workers embodied in its imports averaged US$6500.
Social footprints can add to our understanding of how inequality-implicated commodities move around the world. They provide another tool to assist businesses, governments and NGOs to tackle issues of global employment, inequality and exploitation.
See the other instalments of the series Class in Australia here.