Upgrading or Decline? Globalization, Retail Structure, and Labour in the Chilean Textile and Clothing Industry

Abstract

Trade liberalization has plunged the textile and clothing industry in many countries -both in the developed and developing world -into a crisis with important employment losses. Important differences across countries exist regarding the extent of decline, the productivity performance, and the working conditions for the remaining workers in this industry. Based on elements of global commodity chain analysis and the varieties of capitalism (VoC) approach, these different patterns have been explained for developed countries, placing particular emphasis on the scope and effective implementation of industry-wide minimum wages and labour regulations, as well as on retail concentration.In this article, we apply the above framework to Chile, where the process of downsizing of the industry has followed the least virtuous pattern, with meagre productivity results and precarization of remaining employment. Part of the remaining textile and clothing employment has moved to the informal economy and sweatshop-type enterprises. This outcome is explained by the high degree of retail concentration in Chile, the virtual absence of sectoral collective bargaining and the partial coverage of labour inspection among micro and small enterprises.

Sowing consumers in the garden of mass retailing in Chile

“…Actually, stores have been associated with some of the most relevant recent social trends in this country such as increasingly flexible and precarious work conditions (Gálvez, Henríquez, and Morales 2009;Reinecke 2010;Stecher 2013), the shopping mall as key site of social encounter (Farías 2009;Stillerman and Salcedo 2012); and indebtedness and the development of new finance practices (P. Barros 2009;M. Barros 2011;Moulian 1998;Ossandón et al 2011).…”

Mejoras económicas y sociales en las cadenas mundiales de suministro. Las experiencias del Cono Sur

“…La expansión de la CMS como modelo de negocio en el sector textil y de la confección en Chile ha transformado por completo esta rama de actividad y, en consecuencia, ha provocado la desaparición de las empresas nacionales, una brusca caída del empleo (Reinecke, 2010) y el auge de una nueva estructura polarizada que refleja el desarrollo antagónico en la cadena. Por una parte, durante el último decenio se ha logrado una clara mejora económica con la expansión de empresas minoristas multinacionales chilenas, apodadas «multilatinas», cuyo surgimiento representa una mejora funcional, dado que han asumido el papel de empresas líderes que coordinan la producción de la confección acabada (principalmente en plantas de producción asiáticas de bajo costo) para venderla a través de sus propios establecimientos y marcas, que se han extendido a varios mercados latinoamericanos, como la Argentina, Brasil, Colombia y Perú.…”

Racing to the bottom, or climbing to the top? Local responses to the internationalisation of trade in the Brazilian textile and garments industry

“…Morris and Einhorn (2008) analyse the impact of Chinese imports on the South African clothing and textile sector and argue that its consequences are complex and multi-facetted: for some items the standard of imported garments has improved, to the benefit of consumers, but this has also forced the entire domestic industry to upgrade. Reinecke (2010) analyses the experience of Chile and argues that, after 45% of employment was lost as a consequence of the ending of international textile quotas, the quality of the remaining jobs has been poor, with clear tendencies towards precarisation and informalisation. In Chile, short-term flexibility strategies have helped enterprises survive, but they have also drawn the sector into a vicious circle of enterprise strategies causing poor employment quality, which in turn blocks more innovative enterprise strategies [Reinecke, (2010)…”