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-  2018 

Trajectories of development and the global clothing industry

DOI: 10.1177/1024529418768608

Keywords: Clothing/apparel industry,employment and wages,Lewis-like growth,productivity,trajectories of development,upgrading and downgrading

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Abstract:

Clothing production increasingly occurs in global value chains. Industrial policies typically recommend ‘upgrading’ (increasing labour productivity by becoming more skill- and capital-intensive and producing higher valued products) yet firms can and do move up and down the value chain when profitable opportunities arise. This paper uses United Nations Industrial Development Organisation data on remuneration, output and employment to identify recent national development trajectories for the clothing industry. Upgrading trajectories can be pro-labour (have a rising wage share of value added) or pro-capital (a rising profit share). Pro-labour trajectories can deliver rising average wages and employment (e.g. India and China) or higher average wages for fewer workers (e.g. Sri Lanka). Pro-capital trajectories can also deliver higher average wages and employment growth (e.g. Vietnam) or rising wages for fewer workers (e.g. South Africa). Downgrading trajectories are typically associated with falling average wages but can be associated with rising average wages (as in Turkey). The desirability of a particular development trajectory depends on the economic context, especially labour market conditions. Upgrading trajectories are to be expected when unemployment is low and there is upward pressure on wages. Where unemployment is high, employment objectives are most quickly met through downgrading trajectories in which aggregate labour productivity falls as labour-intensive activities expand

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