In this introduction to our book, Inclusive Dualism, we revisit W. Arthur Lewis’s famous model of development with surplus labour. Lewis emphasized the benefits of dualism, by which he meant economic differentiation and the coexistence of sectors (and of firms within sectors) characterized by different levels of productivity and wages. He proposed an expansion of relatively low-wage, labour-intensive jobs that would raise productivity by drawing ‘surplus’ labour out of subsistence activities. When such surplus labour dried up, wages would rise. In contrast to Lewis, post-2000 advocates of decent work fundamentalism promote wage increases as an instrument to increase labour productivity irrespective of labour market conditions. In the presence of surplus labour, this can have dystopic consequences, as the South African case shows. In South Africa, with its very high unemployment rates, strategies to promote relatively high-wage, high-productivity jobs came at the cost of labour-intensive development and even job destruction, thereby exacerbating poverty and inequality.
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