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Copyright of International Journal of Labour Research is the property of International Labour Organization and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of International Journal of Labour Research is the property of International Labour Organization and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Value chains are characterized by power asymmetries, with lead firms in the dominating position and dominated firms mainly in developing countries which compete worldwide to take over certain tasks in the production process of goods. The competitive pressure to produce at low cost in low value adding segments of global value chains (GVCs) increases the pressure for low wages and poor working conditions. Industrialization in the low-value segment can increase productivity and living standards to a certain extent in economically underdeveloped countries, but in the end the allocation of production in GVCs prevents any true catching up, leaving developing countries stuck in the so-called middle-income trap. Vertical GVCs based on subcontracting typically lead to very low value added, low technological spillover and the worst working conditions. Vertical GVCs based on FDI are on average more advantageous, but without government rules and interventions they are not a ladder to eventually joining the group of developed countries. There is no doubt that decent working conditions have to be established at all levels of value chains. In addition, unions should support and join efforts to create more democracy in multinational companies and push for an economically and socially fairer investment and subcontracting policy which strengthens training and technological transfer. Unions can play a significant role in industrial and other policies which are important for catching up, as well as supporting initiatives to devise global regulations and sanctions for multinational companies. [ABSTRACT FROM AUTHOR]