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The New Face of Unequal Exchange: Low-Wage Manufacturing, Commodity Chains, and Global Inequality

By on September 01, 2003

The institutional structure of global commodity chains and cross-border production networks has a profound impact on how the benefits of globalized production are distributed. This paper engages with this issue by developing a model that combines the insights of earlier unequal exchange theorists and new work on global commodity chains to clarify the distributive dynamics of the expansion of low-wage manufacturing in the developing world. In this framework, the ability of productivity-led development to raise employment incomes in low-wage manufacturing is  constrained and depends on how the benefits of productivity improvements are captured – as lower prices for consumers or higher rents for brand- name multinationals. In contrast, consumption-led growth in relatively affluent consumer markets will contribute to income convergence when demand for manufactured consumer imports is sufficiently income elastic. However, in the long-run, labor market, macroeconomic, and environmental constraints will likely compromise this form of export-led employment growth.

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Heintz, James. The New Face of Unequal Exchange: Low-Wage Manufacturing, Commodity Chains, and Global Inequality. Political Economy Research Institute Working Paper, No. 59, , . Political Economy Research Institute, University of Massachusetts Amherst, 2003. Heintz, J. (2003). The New Face of Unequal Exchange: Low-Wage Manufacturing, Commodity Chains, and Global Inequality. Political Economy Research Institute Working Paper, No. 59, , . Heintz, James. "The New Face of Unequal Exchange: Low-Wage Manufacturing, Commodity Chains, and Global Inequality." Political Economy Research Institute Working Paper, No. 59, Political Economy Research Institute, University of Massachusetts Amherst, 2003, .Heintz James. "The New Face of Unequal Exchange: Low-Wage Manufacturing, Commodity Chains, and Global Inequality." Political Economy Research Institute Working Paper, No. 59 (2003). Heintz, J 2003, 'The New Face of Unequal Exchange: Low-Wage Manufacturing, Commodity Chains, and Global Inequality', Political Economy Research Institute Working Paper, No. 59, . James Heintz, 'The New Face of Unequal Exchange: Low-Wage Manufacturing, Commodity Chains, and Global Inequality' (2003) Political Economy Research Institute Working Paper, No. 59 Heintz J. The New Face of Unequal Exchange: Low-Wage Manufacturing, Commodity Chains, and Global Inequality. Political Economy Research Institute Working Paper, No. 59. 2003. Heintz, James. The New Face of Unequal Exchange: Low-Wage Manufacturing, Commodity Chains, and Global Inequality. Political Economy Research Institute Working Paper, No. 59. 2003. , .

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