Unequal exchange of labour in the world economy

Jason Hickel, Morena Hanbury Lemos and Felix Barbour

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Researchers have argued that wealthy nations rely on a large net appropriation of labour and resources from the rest of the world through unequal exchange in international trade and global commodity chains. Here we assess this empirically by measuring flows of embodied labour in the world economy from 1995–2021, accounting for skill levels, sectors and wages. We find that, in 2021, the economies of the global North net-appropriated 826 billion hours of embodied labour from the global South, across all skill levels and sectors. The wage value of this net-appropriated labour was equivalent to €16.9 trillion in Northern prices, accounting for skill level. This appropriation roughly doubles the labour that is available for Northern consumption but drains the South of productive capacity that could be used instead for local human needs and development. Unequal exchange is understood to be driven in part by systematic wage inequalities. We find Southern wages are 87–95% lower than Northern wages for work of equal skill. While Southern workers contribute 90% of the labour that powers the world economy, they receive only 21% of global income.

JEL-codes: F14 F16 J31 P45 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2024-07-29
New Economics Papers: this item is included in nep-hme and nep-int
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Published in Nature Communications, 29, July, 2024, 15(1). ISSN: 2041-1723

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