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  Outsourcing
 
Batt, Rosemary & Nohara, Hiroatsu, "How Institutions and Business Strategies Affect Wages: A Cross-National Study of Call Centers", Industrial and Labor Relations Review v. 62 no4 (July 2009) p. 533-551

Abstract:
This article takes a look at wage dispersion and union wage differentials in call centers, a growing industry which represents a challenge to existing market rules and collective bargaining institutions. The study compares coordinated economies, liberal market economies, and emerging market economies. In general, the authors hypothesize that wage trends will follow the results of prior studies in other industries: that wage dispersion and union wage differentials will be highest in the most liberal economies (like the U.S.) and lowest in the most coordinated economies (like Ireland). This shows itself to be partially true: the U.S. indeed has high levels of wage dispersion and a high union wage differential, but from there the findings were not directly related to the level of market coordination and liberality. In fact, the study shows that business strategies of outsourcing and customer service segmentation also greatly affect wage trends. Further, the authors hypothesize that wage trends in emerging market economies will more closely mirror those in liberal market economies than coordinated economies. According to the authors' findings, this is indeed the case. Finally, the authors conclude with a list of potential limitations to their study methodology, as well as suggestions for areas of future research.

Subjects: Case Studies: Industry-Specific, Collective Bargaining, Comparative Labor Law, Outsourcing
Newsletter: Vol 11, Issue 5
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Blasi, Jeremy , "Using Compliance Transparency to Combat Wage Theft", Georgetown Journal on Poverty Law and Policy v. 20 (Fall 2012) p. 95-140

Abstract:
This student note argues that wage theft compliance information, when disseminated to consumers, could steer consumers away from businesses that violate wage laws. The author posits that unions, which have low rates of representation among restaurant and retail workers, are no longer viable tools for low-wage workers to use to secure better working conditions. In addition, the author argues that traditional government enforcement practices have become outdated and ineffective. Further, many US-based brands manufacture their products through international subcontractors, and often disclaim all responsibility for the subcontractors’ labor law violations. The author claims that government enforcement of wage payment laws encourages limited compliance, but he claims that companies will not comply with wage and hour legislation or monitor their international supply chains unless they believe it is morally wrong to violate wage laws. Hence, he argues, transparency-based compliance measures could shift national opinion about the moral implications of wage theft. In addition, brand-based transparency, which would highlight wage theft throughout the brand’s international supply chain, would create a moral incentive for brands to push their suppliers to comply, even though doing so would increase costs. The author believes that these cost increases could be offset by the increased patronage of informed consumers, who would also have access to information regarding a brand’s compliance.

Subjects: Corporate Accountability, Outsourcing, United States
Newsletter: Vol 12, Issue 9
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Bognanno, Mario F. & Keane, Michael P. & Yang, Donghoon, "The Influence of Wages and Industrial Relations Environments on the Production Location Decisions of U.S. Multinational Corporations", Industrial and Labor Relations Review v. 58 (January 2005) p. 171-200

Abstract:
This Article utilizes extensive data culled from seven manufacturing industries and 22 countries over 10 years to determine how tariffs, wages and industrial relations environments affect U.S. multinational corporations’ decisions to locate assets and employment abroad. Ultimately, the Article concludes, that while a low wage base, a decentralized bargaining structure and minimal recriminations for layoffs do influence corporate locational decisions, they are not dispositive. Rather, they find that host country market size – that is, GDP – was the key determinant of locational decisions for U.S. corporations. Furthermore, the Article finds that tariff reduction-legislation such as NAFTA and GATT do not lead to a hemorrhaging of U.S. jobs or assets abroad. In contrast to previous data studies on the same subject which have used data from only one-year or used data aggregated at the national level, the authors employ industry-level panel data from the Bureau of Economic Analysis, plus other data sources which have been merged to reach their conclusions.

Subjects: NAFTA/GATT, Outsourcing
Newsletter: Vol 4, Issue 10
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Emilcar, James , "Note: A Proposal to Prevent Offshoring: an Analysis of the Latest Anti-Offshoring Proposals ", Journal of International Business and Law v. 11 (2012) p. 205-224

Abstract:
This student note explores the detrimental effects of offshoring on the American economy and possible legislative response. The author suggests companies view offshoring as beneficial because it allows them to lower their production costs by replacing expensive domestic labor with cheaper foreign labor. However, the author notes the displacement of workers due to outsourcing harms the domestic economy. He identifies four types of legislative efforts aimed at addressing the employment displacement issues. The first sees offshoring an opportunity and opposes anti-offshoring legislation because it will further weaken the American economy. A second believes the government should oppose offshoring and attempt to protect American jobs by penalizing companies that engage in offshoring. A third supports providing domestic companies with subsidies and financial support to help them compete with companies that participate in outsourcing. The fourth views offshoring as inevitable and believes that the appropriate response is to focus on innovation to enable U.S. firms to adapt to the global economy. The author argues that the failure to enact anti-offshoring legislation reflects the limited promise of punitive measures, which may violate international trade agreements. Instead the author concludes legislators should focus on effectively implement training and adjustment assistant programs for displaced workers.

Subjects: Outsourcing
Newsletter: Vol 12, Issue 4
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Engle, Karen, "Special Feature: Working Borders: Linking Debates About Insourcing and Outsourcing of Capital and Labor", Texas International Law Journal no40 (Summer 2005) p. 691-798

Abstract:
This article summarizes a conference on "Working Borders: Linking Debates About Insourcing and Outsourcing of Capital and Labor" held at the Univ. of Texas Law School in February, 2005. The conference focused on two phenomonon: "Insourcing," i.e., US employers' "importing" immigrant labor, particularly Mexicans, to perform low-wage service work; and "Outsourcing," i.e. the movement of high-tech service work abroad. The speakers conceptualized insourcing and outsourcing as complementary and inevitable dynamics of economic globalization. They also linked US debates on immigration reform to jobs lost to outsourcing. They discussed regulatory responses to global flows of goods, capital and labor, and they examined the prevailing citizenship model that links rights to nation of birth. In the concluding roundtable, participants discussed the prospects for promoting and regulating of labor rights in a way that would make insourcing and outsourcing less exploitative of both immigrant and outsourced workers.

Subjects: Labor Mobility, Labor Rights in General (Misc.), Outsourcing, Undocumented Workers
Newsletter: Vol 5, Issue 4
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Estreicher, Samuel, "'Think Global, Act Local': Employee Representation in a World of Global Labor and Product Market Competition", Labor Lawyer v. 24 no3 (Winter 2009) p. 235-265

Abstract:
Trade unionism among private sector workers around the world is in decline. The author begins by describing four general explanations that theorists put forth for this decline, including the “Global Product and Labor Market Competition” explanation. Next, he describes two models of workplace representation “the Redistributive Bargaining Agent” model and the “Integrative Bargaining Agent”ť model and explains how these models interact to create distinct brands of unionism in different parts of the industrialized world. The author then describes how the global market and international competition have made it harder for workers to unionize and more difficult for nations to enact meaningful labor standards. Finally, the author posits that the best solution to this global labor crisis is for unions in each country to develop innovative policy solutions that give a voice to workers without harming employers’ economic performance.

Subjects: Comparative Labor Law, Employee Participation and Works Councils, Outsourcing, Trade Agreements
Newsletter: Vol 9, Issue 9
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James, Phil & Johnstone, Richard & Quinlan, Michael & Walters David, "Regulating Supply Chains to Improve Health and Safety ", Industrial Law Journal v. 36 (2007) p. 163-187

Abstract:
This article explores some of the health and safety implications of "externalization," meaning the shift of production from large, integrated multi-department firms to a series of typically smaller, undercapitalized suppliers and subcontractors which many observers have identified as a prominent feature of the new, "boundaryless" workplace. The authors suggest that there are both sound theoretical and empirical reasons for concluding that outsourcing and subcontracting supply chains reduces communication and seriously complicates overall risk management assessments, results in lower levels of supervision and training on health and safety issues, undercuts unions and other forms of collective workplace "voice" which typically play a crucial role in monitoring health and safety compliance, and limits resources available for investment in health and safety measures. They cite studies from various European Union countries indicating that the fatal and major injury rates in small firms are roughly double those of large and medium-sized firms. Studies of efforts to regulate supply chains in the United Kingdom, the United States and Australia suggest that such laws can have positive effect, but that they are often too limited in scope or underutilized. The authors advocate a targeted approach focusing specifically on those industries and sectors relying on "externalized" production and the increased use of temporary employment in hazardous working conditions. In their view, the "asymmetrical power relationships" between smaller enterprises and the larger organizations at the top of the supply chain make the latter well-suited for exerting positive influence and ensuring compliance with health and safety regulations throughout the supply chain through their ability to terminate or withhold contracts.

Subjects: Case Studies: Industry-Specific, European Union, Health and Safety, Outsourcing
Newsletter: Vol 6, Issue 5
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Judge, John, "International Employment Discrimination and Racketeering in the Global Economy", Texas Bar Journal v. 72 no3 (2009) p. 192-199

Abstract:
This article examines the legal implications of a particular business model favored by international carriers: affiliating with a foreign corporation (usually Mexican), who then hires truckers to do work for the carrier within the United States. In most cases, the net pay to the imported drivers is just above half of what the carrier would be paying U.S. drivers, making it a quite lucrative tool for carriers. However, the author notes several problems with such a model. First, it may involve violations of federal and Texas employment discrimination laws by paying lower wages based on national origin. Second, it may violate U.S. immigration laws by breaking the provisions of B-1 Visitor for Business visas. Third, the activity may constitute racketeering, providing for criminal penalties and civil damage awards. Finally, carriers who engage in such a model may be violating the tax law for failure to pay state and federal payroll taxes. Thus while it is tempting for a carrier corporation, such a business model should be rejected in order to avoid a plethora of potential liabilities.

Subjects: Case Studies: Industry-Specific, Immigration, Labor Mobility, NAFTA/GATT, Outsourcing, Undocumented Workers, Workplace Discrimination
Newsletter: Vol 9, Issue 8
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Moldof, Stephen B., "Union Responses to the Challenges of an Increasingly Globalized Economy", Richmond Journal of Global Law and Business v. 5 (2005) p. 119-146

Abstract:
This article surveys the responses of some unions in the United States to the challenges of an increasingly globalized employment environment and the varying degrees of success these responses have met. In several instances, U.S.-based unions have tried to form alliances and networks with unions in other countries, often mirroring the structure of their transnational corporate employers. Some U.S.-based unions have also worked with shareholders, human rights and faith-based groups to challenge the human rights and health and safety practices of transnational employers, such as Exxon-Mobil, Bridgestone, Goodyear, Novartis and Rio Tinto. In the airline, maritime, shipping and other industries where workers are especially exposed to global competition, some U.S.-based unions have sought to counter threats of outsourcing by lending support to unions in other countries engaged in strikes or other labor-management disputes and by lobbying governments and legislative bodies to modify bi-lateral and regional trade agreements to include labor, environmental and health and safety standards. In a dispute involving flights between the United States and the Netherlands, mutual solidarity actions by U.S. and Dutch pilots' unions successfully rebuffed employer demands for concessions and began the process of negotiating a multi-party transnational collective bargaining agreement. The author notes that although U.S. law does not prohibit multi-employer/multi-union agreements between parties located both within and outside the United States, some U.S. courts have refused to enforce collective bargaining agreements when the work site was outside the territorial U.S. The author criticizes this "situs" approach as outdated and unhelpful in an increasingly globalized computer-driven environment, in which it is often difficult to identify a single, fixed workplace location. He also notes that inclusion of "choice of law" provisions in international collective bargaining agreements would not solve this problem because private parties are not free to dictate subject matter jurisdiction in U.S. courts. Instead, enforceability of future transnational collective agreements may require international treaties between the respective governments.

Subjects: Case Studies: Country-Specific, Collective Bargaining, Corporate Accountability, Extraterritorial Application of Law, Outsourcing
Newsletter: Vol 6, Issue 4
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Mordecai, Adam, "Anti-Offshoring Legislation: The New Wave of Protectionism: The Backlash Against Foreign Outsourcing of American Service Jobs", Richmond Journal of Global Law and Business v. 5 (Winter 2005) p. 85-105

Abstract:
This Article takes the position that legislative efforts to limit offshoring (i.e., outsourcing) will have an adverse effect upon both the U.S. and global economy. The author explores the history of the offshoring debate, analyzes protectionist legislation that has been proposed in 35 states and both houses of Congress, examines the positions of both opponents and proponents to anti-offshoring legislation, and addresses the implications of those measures on the U.S. economy and global market. The author notes that most of the anti-globalization arguments emphasize short-term losses to the American workforce for what will eventually benefit all. For example, he explains that although American medical technicians may lose their jobs to Indian technicians who read MRIs for much less, lower prices for this life-saving technology are “virtually assured and many more sick people will benefit as a result.” Anti-globalization legislation, such as laws requiring employees in call centers located overseas to disclose their location, or laws restricting government assistance to U.S. based companies that shift American jobs abroad, prevent U.S. businesses from using their funds for research activities that would benefit their shareholders at home and the global economy generally.

Subjects: Case Studies: Country-Specific, Labor Mobility, Outsourcing
Newsletter: Vol 4, Issue 10
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Tiraboschi, Michele, "The Reform of the Italian Labor Market over the Past Ten Years: A Process of Liberalization?", Comparative Labor Law & Policy Journal v. 29 no4 (Summer 2008) p. 427-453

Abstract:
Tiraboschi seeks to counter the contention of critics, including Italian trade unionists, that the legislative reforms of the past decade were informed by a philosophy of liberalization. He argues that a neoliberal ideology-one based on self-regulation of the market that seeks to "destructure" labor law-formed neither the intentions nor effects of the reform process. Instead, Tiraboschi asserts, Italy's recent reforms are a continuation of past processes responding to an economy characterized by the expansion of an underground, informal economy, innovation due to globalization and internationalization of markets, and the presence of large numbers of women and young people in the in the workforce who require more workplace flexibility. Tiraboschi analyzes reform provisions regarding Italy's constitutional right to work, the regulation of outsourcing, and fixed-term contracts to show that the reforms are consistent with existing case law, consonant with collective bargaining practices and protective labor law, and finally, correspond with the current realities of the Italian labor market, particularly employers' use of informal labor. In sum, Tiraboschi notes that while it may be too early to conclusively judge outcomes, little evidence has emerged to justify critics' prediction the reforms would lead to destructuring of labor law.

Subjects: Case Studies: Country-Specific, Flexibilization, Outsourcing, Workplace Discrimination
Newsletter: Vol 7, Issue 11
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Zimmer, Michael J., "Unions and the Great Recession: Is Transnationalism the Answer?", Employee Rights and Employment Policy Journal v. 15 (2011) p. 123-158

Abstract:
This paper discusses how unions in different countries can create a more equal economic order in the wake of the Great Recession. In the first half, the author describes the public policy basis for unionism: that labor is not a commodity and that economic equality can be achieved through collective bargaining. The author then describes neoliberalism, and argues that neoliberalism is fundamentally at odds with unionism because it treats labor as a commodity and sees labor relations as a zero-sum game between capital and labor. To win in a labor dispute, the prevailing party must be able to leverage their economic position against their opponent’s. To illustrate this point, the author describes two strikes, one at a Motts Applesauce plant in New York State, and the other at four Honda plants in China. In China, the tight labor market and high demand for cars gave striking workers an economic advantage, while in New York, a low regional demand for labor and the manufacturer’s product enabled the employer to withstand the strike and ultimately prevail. From these case studies, the author determines that if unions are to maintain relevancy in the wake of the Great Recession, they must do so by influencing entire industries so that their leverage is not dependant on fluctuations in regional labor markets. Unions can do this by opposing globalization entirely or working to correct the aspects of globalization that are unfair. The author argues that unions also should organize entire employment sectors transnationally, and points to the success of the International Transport Workers' Federation and the United Auto Workers as examples of unions that are beginning to reach across national boundaries.

Subjects: China, Collective Bargaining, Labor Mobility, Outsourcing
Newsletter: Vol 12, Issue 5
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