Veiled Employment: Islamism and the Political Economy of Women’s Employment in Iran

5. The Effects of International Trade on Gender Inequality in Iran: The Case of Women Carpet Weavers

166 5 The Effects of International Trade on Gender Inequality in Iran The Case of Women Carpet Weavers Zahra Karimi Economic globalization is a historical process, the result of human innovation and technological advancements. It involves the increasing integration of economies around the world, particularly through trade and financial flows. Yet globalization has created inequality within and between nations, threatens employment and living standards, and thwarts social advancements by accelerating “the race to the bottom.” Globalization offers extensive opportunities for worldwide development , but it is not progressing evenly. Countries that have been able to integrate are seeing faster growth and reduced poverty. By contrast, many developing countries have not been able to gain from open and liberalized international trade, and face economic stagnation and declining standard of living for the vast majority of the workforce. This chapter investigates the effects of surging international trade on gender inequality in Iran by examining the situation of carpet weavers. To provide a relatively clear picture of the handwoven carpet industry in Iran, in addition to the use of all available statistics and information, I have conducted interviews with ninetysix carpet weavers in Kashan (which is famous for its handwoven carpets worldwide). Effects of International Trade on Gender Inequality • 167 This chapter starts with a review of the literature on globalization and gender inequality, especially in labor-intensive export sectors, where women are mainly concentrated; it shows how international competitions have led to a “race to the bottom,” especially in developing countries. Then the chapter focuses on Iran’s export trends in order to show the effects of globalization on Iran’s labor-intensive exports. It examines Iran’s share in international carpet markets to analyze the effects of declining exports on changes of labor force structure in the handwoven carpet industry. In this regard the age, gender, education, and income of weavers and the position of carpet weavers in households are extracted from the results of our survey. The Impact of Globalization on Gender Inequalities Globalization has intensified in the past decade, leading to a new global outreach through an unprecedented surge in international trade flows and cross-border capital movements. The increased capital mobility combined with an accelerated pace of technological change pose serious opportunities and challenges for the development of the human resources and labor market policies in many developing countries. Not every developing country is going to be a winner in the new global contest. Adverse effects and asymmetrical impacts across various sectors and countries are widely expected. In fact, the distribution of benefits from trade liberalization is likely to be highly skewed between countries and within countries. Competition between nations or states over investment and export-markets leads to the progressive dismantling of regulatory standards that is known as the “race to the bottom.” This process implies that the states compete with each other as each tries to underbid the others in lowering production costs, real wages, and taxes to make itself more attractive to outside financial interests. This action would hurt all nations except the one that undercut the others (Tonelson 2002). Some may believe, however, that the “race to the bottom” can help ameliorate poverty, for if businesses can operate for less money, 168 • Veiled Employment they can cut prices while maintaining their profit margins. In other words, it can be possible to trade off employment and growth with labor standards. Yet, in general, the benefits of globalization in accordance with this competitive logic have not trickled down to those who make the products. The race to the bottom works to undermine the ability of governments to enforce labor standards such as workers ’ compensation and working conditions (Rodrik 1999). But the winner is the country that defines the bottom. Therefore, globalization has been associated with declining labor standards in most countries, especially in developing countries. Many governments ignore the violation of labor laws in order to encourage investment and to promote exports (Stiglitz 2002; Standing 1999). Because of declining oil prices since the early 1980s, the appearance of economic stagnation on the one hand, and recommendations by international financial institutions such as the World Bank and IMF on the other, oil-exporting countries have started reform programs for privatization to increase the efficiency of economic sectors (Bell 1995). The main objectives of the reform policies were to accelerate growth, to diversify exports, and to create sufficient job opportunities in order to address a rise in...