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Does globalisation promote employment? (Job quality (2-speed labour market…
Does globalisation promote employment?
International competition
Cost-cutting
Loss of domestic jobs
Developed countries
Off-shoring
2008 financial crisis
Job losses due to competing goods from emerging countries
Surviving Sectors
Agribusiness
Located close to distribution market
Less affected by international competition
Chemicals
Cars
Largely unaffected by international competition
Equal exchange of imports/exports
Job losses in OECD countries mainly caused by import of low value-added goods produced in emerging countries
Decreased competitiveness in developed countries
1990's textile industry
Re-focused on high-value ie, haute couture
Other sectors without specialised skills and technology similarly affected.
Chinese flooded market with cheap clothes
Domestic markets closed or down-sized
1970-2003 60% reduction in workforce in G7 countries
Why?
De-industrialisation
#
Not so in Korea, Mexico & Ireland
Increase in industrial jobs
Foreign investment
Dell until 2009
Wage competition
Offshoring
Industry & services
One wage-earner out of 5 works in an industry that could be outsourced
Labour-intensive, low skill areas
Direct consequence of globalisation
Savings lead to new investments
Increased turnover & sales
New workers hired
Main cause of job losses
Organisational restructuring
Process improvement
Technological advances
Strategic re-orientation
Indirect consequence of globalisation
Job creation in high-tech industries & services
More service jobs created than lost industrial jobs
Low unemployment rate until 2008 financial crisis
Wage increases for skilled workers
Developing countries
Globalisation = job creation
New business & offshoring
Job quality
Lower salaries in low value-added sectors
Threat of off-shoring
Union reduction
Productivity & profits increasing but wages declining
High quality jobs created in sectors where countries have a comparative advantage in international markets
Hiring of better trained & more productive workforce
2-speed labour market
Unskilled workers' wages shrunk
Wages of educated & experienced workers in prime niches have soared
Wage inequality increasing
Main factors: institutional & political
Job insecurity
Offshoring to low wage countries
Reduction of union bargaining power
Downward pressure on wages
Unskilled jobs
Lack of workers' rights
Part-time work & FTCs
Zero hours contracts
Government policies
Boost employment
Lifetime training & education
Political & fiscal policies
Key Factors
Competition, legislation & technology