View source for The Mobility of Labor and Capital



In the late 1980s and early 1990s, Saskia Sassen published two works that led to widespread debate and discussion among academics. The first, ''The Mobility of Labor and Capital: A Study in International Investment and Labor Flow'', focuses on the impact of transnational space on capital and labor. The second, ''The Global City'', postulates that the transnational/international economies of globalization required urban nodes with dense infrastructures of telecommunications, specialization, and producer services (think accounting, engineering, IT, business law and the like) to control and manage the dizzying array of financial products, instruments, and capital mobility. The two works illustrate a continuity of themes and focus including the affects of foreign direct investment (FDI) on local economies and its role in the subsequent internationalization of production, the creation of both high level specialized producer services and low level wage employment (often in consumer services or in support of producer services and their workers), and the growth of “high tech” cities and the beginnings of Sassen’s global city argument.

First, changes in FDI shifted the destination of such investments. If Latin America’s share declined, America’s rose to a great degree due to Japan’s capital infusion (Southeast Asia also experienced increases as well). With FDI comes an increased transnationalization of production. Enterprise Zones (EPZs) facilitate the movement of labor into various global regions (the U.S./Mexico border serves as one obvious example) but of equal importance are the multinational, diplomatic, and military linkages established by creation of such institutions.

Second, these linkages facilitate immigration. Here, Sassen pushes back against the traditional narrative that suggests poverty spurs such labor movements. However, Sassen argues that though poverty serves as one push factor, these linkages provide another. Culturally dominant, they establish labor flows to the nations from which they originate. Sassen points to examples such as South Korea where immigration to the US expanded significantly despite the nation’s own economic success. “Isolated” nations or those lacking the linkages Sassen points out illustrate lower rates of immigration. This helps to explain in part, “the contradiction between the existence of labor shortages and the existene of large unemplouyment worldwide … “ Additionally, Sassen notes the markedly gendered nature of these immigration/labor flows, newer countries such as China, South Korea, Colombia, Jamaica and the Dominican Republic feature heavily female flows while “traditional immigration countries such as Italy, Portugal and Greece have mostly males.” While such divisions are relevant, Sassen notes a key aspect of this “new” immigration, “is the increase in the supply of female immigrant workers”. Providing a more quantitative sociological approach than Roy’s ''City Requiem'', Sassen points the very feminization of poverty and wage labor others like the aforementioned Roy or Nicolas De Genova have explored from more culture oriented anthropological perspectives. Sassen acknowledges similar developments connecting them more broadly, “The feminization of the new proletariat has also been found to contribute to male and unemployment and, in several cases, to male emigration. It does so directly and indirectly.” Women workers often suffer brief employment (five years in many export processing zones) which results in termination. However, having been “westernized” leaving them with few options, one being emigration. Ultimately, traditional work and family structures are altered sometimes causing “the disruption of [these] structures” along with the aforementioned “westernization”, “both of which minimize the possibilities of successful reincorporation in the work lives that preceded employment in the [export processing zones].”

Third, Sassen suggests immigration’s affect on wages may be less severe than some argue. Though she addresses this argument in greater detail in ''The Global City'', Sassen suggests immigrants do not drive down wages or cause the casualization of labor but rather find themselves situated well to take advantage of such opportunities which arise out of the kinds of structural changes Sassen explores, “the emergence of the informal sector in major American cities is largely a function of the kinds of growth trends presently concentrated in such cities, rather than …. A function of rising unemployment per se or an import from the less developed world brought in by the massive immigration flux.” Similarly, such developments result in the increasing employment of immigrant labor in service industries, “Thus, the growing concentration of immigrant labor in the service sector of highly industrialized countries may be pointing to constraints in the historical transformation of the international division of labor, in so far as most service jobs must be performed in situ.” Additionally, Sassen notes two other relevant factors, the increased use of “immigrant labor in the tertiary sector of developed countries and the growing use of foreign and native migrants in the sector of developing countries.”

Fourth, one easily identifies the seeds for Sassen’s later work ''Global City''. Previewing many of her insights, Sassen notes that cities such as New York and Los Angeles feature the dual growth of labor intensive small scale industries along with an increasing large consumer services market. Again, Sassen pushes back against many of the traditional beliefs regarding urban economies. Both “backward” industries and more dynamic producer service contribute to growth, “Backward jobs can be part of the most modern sector of the economy and backward sectors can be part of the major growth trends in the economy.” In this context, immigration provides some relief to such sectors offering “a solution to the cheap labor question in strategic locations of the economy at a time when important process of economic restructuring and reorganization are taking place.” Sassen’s new economy creates jobs at the producer service level but also at the low wage end of the spectrum. Middle income employment declined resulting in “the increasing polarization of the occupational and income distribution in the labor force.” However, Sassen cautions scholars to consider carefully the meaning of this expansion of low wage employment, “the available evidence for New York City shows that a majority of immigrants find employment in rather low wage jobs. The mistake lies in assuming that low wage jobs are predominantly a function of decline and backwardness.” The decentralization of office work, mechanical decentralization, and the international flow of producer and some consumerist services have contributed to the increasing importance of global nodes such as New York. Obviously, Sassen returns to and expands upon many of these insights in ''Global City''. Finally, Sassen argues that two types of investment zones are emerging 1) financial and 2) industrial. Cities like New York or LA contain the necessary resources to serve as locations “for the placement of financial investments.” Yet, not only global cities appear to compete internationally, rather “the combination of inputs and markets has made certain regions in the U.S. competitive with Third World areas providing low production costs and a disciplined low wage workforce. Southern California and the New York Metropolitan area are examples of such industrial zones.”