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| Maria N Ivanova |
From 2007 to 2009, the United States (US) experienced a major financial and economic crisis, a ‘Great Recession’, whose depth, severity, and global impact evoked numerous comparisons with the deepest structural crisis of the twentieth century – the Great Depression of the 1930s. There are significant similarities between the circumstances and dynamics surrounding both crises. And yet, those similarities should not distract from even more important differences.
The boom and the bubble: then and now
The Great Depression and the Great Recession were triggered by asset-price bubbles – a stock market bubble in the late 1920s and a housing bubble in the 2000s – but pre-existing structural imbalances in the US economy were the reason why the burst of speculative bubbles induced a general economic collapse. One fundamental imbalance was the highly unequal growth of property income relative to labour income. The combination of relatively stagnant labour income and surging corporate profits played a leading role in the run-up to the downturns and was chiefly responsible for the slow recoveries. The boom and the bubble in both instances were driven by similar dynamics: sluggish wage growth and falling labour share of national income, deepening inequality with heavy concentration of wealth gains at the top, corresponding mounting indebtedness among lower- and middle-income households, surging corporate profits and a corporate saving glut seeking financial ventures. Thus, two causal mechanisms underlay the structural fragility of the economy then and now. On the one hand, the stagnation of labour earnings represented a key factor behind rising income inequality and a drag on consumption which was temporarily alleviated by credit expansion; hence, the rising household debt levels which eventually became unsustainable. On the other hand, rising corporate profits created an overhang of idle money, eager to lend itself to speculative ventures, which played a key role in fuelling the stock market bubble of the 1920s and the housing bubble of the 2000s.
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| Karin A. Siegmann |
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| Peter Knorringa |
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| Jeroen Merk |
Globalisation of production has been accompanied by a rise of informal and insecure work across different regions of the world, even in formal establishments. Yet, the role of labour has received scant attention in both the governance and analyses of global production networks (GPNs). Therefore, activists and scholars have demanded a “sea-change in the international business model and the active participation of informed and empowered workers” (Brown 2013: 5) that needs to be flanked by an analytical framework that puts workers’ agency at the centre.
This has motivated us to analyse the Freedom of Association Protocol, a voluntary initiative (VI) that has been implemented in the Indonesian sportswear industry since 2011. In that year, Indonesian exports of leather and leather goods peaked, generating more than 230 million USD in revenues (Statistics Indonesia 2014: 107). Overall, more than 600,000 workers were employed in the footwear industry in the same year, including production for the domestic market (CCC 2014). In export factories manufacturing footwear for Nike alone, one of the largest foreign buyers, more than 128,000 workers are currently employed, the vast majority of which are women workers (Nike 2014).
