Unequal Exchange

wpc at cs.strath.ac.uk wpc at cs.strath.ac.uk
Thu Jan 26 08:03:49 MST 1995


>At one level, this is wrong.  Check out the research of Harley Shaiken on
>the Mexican auto industry: "low wages in the high tech, export-oriented
>sector have little to do with either productivity or quality.
>Manufacturing compensation in Mexico was 15 percent of the US level in
>1992....The huge supply of surplus labor in the traditional sector spills
>over into the high tech sector, pushing wages downward.  These depressed
>wages have little relation to the productivity of the advanced sector but
>offer a 'persistent advantage in unit labor costs' (Blecker)" Quoted from
>Latin American Research Review, Spring 1994, p. 68

It is true that in individual US owned plants the
partial productivity of labour in Mexico approaches
US levels, but this is only with respect to direct
labour inputs. To maintain the total productivity
comparable with US levels, the means of production
including intermediate goods have to be imported.
This is becase the mean productivity level in the
Mexican economy as a whole is far below US levels.

It is the mean labour productivity that sets an
upper bound on the average wages in a country.
Competition between workers ensures that US branch
plants can hire labour power at rates only slightly
above the Mexican average. In consequence these
workers will be exploited at an exceptionally high
rate. But this high rate of exploitation relates
to the relationship between labour and capital,
rather than between the labours of different
countries. It thus proves nothing about unequal
exchange.

In determining the average productivity of labour
in a less developed country, the agricultural
sector is decisive. It constitutes a huge latent
reserve of labour, working under pre-capitalist
conditions and at very low labour productivities.
It pulls down the average labour productivity and
and has a similar effect on wage rates.

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