Here’s part two of a three part series.
Read Part I HERE!
Many of these food related trans-national corporations are now controlling a large portion of food production and distribution in various parts of the world (Phillips 40). McDonald’s and other trans-national franchises do not merely set up restaurants overseas but import entire systems of agricultural production (Schlosser 230) by spending years preparing the food and supply lines which will enable them to maintain consistency in quality and presentation from one country to the next. More than five years before McDonald’s entered India, they began to teach Indian farmers how to grow ice berg lettuce by providing them with the specially designed seeds (Schlosser 230). This approach puts a growing number of farmers more and more dependent on these corporations. The list of companies who are currently controlling a large portion of overseas food production in many countries is a veritable list of powerful American led corporations (Schlosser 230-231) who have pushed expansion and consolidation in every market they have entered. These expansions are in a never ending search for new markets and cheaper labor (Phillips 40) and they are having a strong impact on government policy regarding economic development, capital, and labor. Ishak Shari from the Institute of Malaysian and International Studies writes “national production systems are increasingly determined by foreign development, and links between firms and parts of transnational enterprise are increasing” (254). As the food production system continues to be globalized and consolidated, many small overseas farmers like their American counterparts have found themselves in very vulnerable positions (Phillips 41). As the small farmer gives way to larger corporate farms, the continued consolidation will undoubtedly have serious consequences for labor and poverty.
Countries are drawn to trans-national corporations for the promise of capital investment which will, hopefully, spur on development, increase wage earning potential, and help alleviate poverty and unemployment. These corporations and the capital they bring with them have become major elements into how a country writes labor and social policy (Shari 253). In many respects, countries desperate for investment increasingly make business conditions more favorable to entice these trans-national corporations. These investment incentives and enticements give corporations huge advantages which are often too good to ignore. Shari argues that one of the changes that has occurred is that as capital has become more mobile than labor, the tax burden has been shifted away from capital and placed onto labor (254). Countries are now competing for foreign investment by offering subsidies for capital investment; the one offering the greatest subsidies wins the investment while other countries are left behind (Shari 254). Labor is taxed, but capital is subsidized. This is an example of how money talks and those without it are put at a decided disadvantage. In essence, the labor and working class of many foreign nations end up subsidizing large, wealthy corporations by virtue of using their tax revenue to subsidize foreign investment. The carrot at the end of a trans-national corporation’s stick is often too tempting for a developing country to pass up especially with the alternatives of having less investment being even less appetizing; however, the fact remains that the workers and the farmers are often the ones caught in the middle.
The large fast food corporations have brought about large consequences for domestic and overseas labor. In America, they have created minimum wage jobs which require little training and very little independent thinking. The consolidation of food production has led to low wage immigrant jobs in the food processing plants and even poverty wages for illegal immigrants (Schlosser 150). These immigrants often have no recourse of action if their labor is abused and end up being stuck in poverty-like situations. The same has become true for many of their overseas counterparts. The need for corporate profit continues to push firms to find ways to minimize labor costs whether it is through finding cheap labor overseas or by importing foreign workers who are willing to work for less. More and more overseas firms are depending on temporary workers, part-time workers and outsourcing (Shari 255). Anyway you look at it the labor force is being pushed around by corporate initiatives and government policies which often allow and encourage these actions. We must, however, temper our criticism of the trans-national corporations by acknowledging foreign investment has literally helped millions of third world workers who now have unprecedented opportunities because of global expansion (Krugman 33). The wages received by many workers may be low and the conditions may be poor, but it is often better than what they would receive by working for a local company.