Economics professors Tina Das and Steve DeLoach recently presented their paper, “Political Power and International Labor Standards” at the 78th Western Economic Association International conference in Denver, Co., July 11-15. Das and DeLoach co-authored this paper with senior economics major Lindsey Conley. This research was the result of a Summer Undergraduate Research Experience (SURE) grant in 2002.
The paper analyzes the recent controversy over the economic rationale and fairness of international labor standards. The harmonization of international labor standards has become a controversial issue in international trade relations. Since the 1999 WTO meetings in Seattle, the debate has been at the forefront of popular consciousness. With this in mind, Das, DeLoach and Conley investigated the impact of threats of trade sanctions on country’s decisions to adopt labor standards. In particular, they examined the importance of a country’s political power in the face of such threats.
Based on empirical analysis, they found that wealthier countries are more likely to choose higher levels of labor standards. In addition, they found that, contrary to popular opinion, countries with greater political power actually tend to have higher levels of labor standards. Their results also suggest that smaller, less powerful countries are merely ratifying international labor standards, but not actually enforcing them, in an effort to mitigate political pressure from Western countries.
Das, DeLoach and Conley argue that international trade agreements should not be based on the principle of global equality of labor standards. In other words, poor countries should not incur trade sanctions for failing to observe high labor standards. Rather, if wealthier countries wish to improve global working conditions, monetary support is needed to assist poorer countries establish and maintain the costly legal infrastructure necessary to increase worker protection.