Relationship between
Globalisation and Employment
Globalisation 🌐
Creates more jobs 👩🏽💼
Increased international competition in all sectors
technology and legislation
Increased wage inequality
Jobless rate rose in 2007/2010
Has different phenomena
international trade, migration and FDI
Offshoring
increased economic integration
The Organisation for Economic Co-operation and Developmen (OECD)
Imported products competing against domestic products have spawned job losses
Clothes made in China was sold at unbeatable prices proved fatal to a vast swathe of the textile industry in several OECD countries
Had to refocus on branches with higher value added, such as textile technology.
. The automotive, pharmaceutical and chemical sectors are largely dependent on international competition
wage competition
prompts many OECD companies to outsource production
Created jobs loss
Many (OECD) countries use this to seek out labour in least-cost countries.
Many companies only outsource part of their production.
Job losses
Duo to bankruptcies, new technologies, companies’ strategic re-orientation
In2007, just before the global economic crisis, the average unemployment rate of 5% in OECD countries was at its lowest since 1990.
People taking on low wages to have work
lower employment quality in developed countries
as it reduces corporate union activism
international pressure
traditional sectors such as textiles, cars or electronics
job quality has worsened in the now less-competitive sectors
high-quality jobs have been created in sectors where these countries have a major comparative advantage in international markets
wages
unskilled workers have shrunk
educated and experienced workers in prime niches have soared
growing inequality
institutional and political changes and technological advances
offshore to low-wage countries with less rigid social legislation weakens unions’ bargaining power and exerts downward pressure on employment quality.
where laws and practices often give less protection to employees.
use of sweatshop
foreign company purchased a local business, wages quickly rose
wages are rising in other sectors or countries
Three major types of measure were implemented to address the crisis
Introducing part-time work programmes
governments (including in Japan) aimed to support the unemployed proactively, by extending the available subsidies to include temporary workers who had lost their jobs
governments proactively increased their support for pro- grammes to help people return to work. Public budgets to employ people in the public sector
Crisis
international trade fell
Unemployment rose
wages are very high – did not experience a weaker employment market
that technological development still has more influence on rising inequality than global economic integration.
Competition from lower income countries can decrease employment in richer countries. During times of global recession, ironically, globalisation can also help to promote employment.