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Globalisation and Labour

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Tom Mouland

on 1 February 2013

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Transcript of Globalisation and Labour

Abena Addison
Jamie Bisley
Mohanned Elmallah
Thomas Mouland How does Globalisation Impact on Labour? What is Globalisation? Flow of Labour ‘The process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture.’

"We must ensure that the global market is embedded in broadly shared values and practices that reflect global social needs, and that all the world's people share the benefits of globalisation". - Kofi Annan

"In its simplest sense globalization refers to the widening, deepening and speeding up of global interconnectedness" - (Held et al., 1999) Outcomes of Globalisation Increased trade between countries
Leading to the formation of more trading blocs.

Barriers to enter a market have decreased, increasing competition; increase efficiency, lower prices.

Internationalisation of financial markets mean there is easier movement of money around the world.

As globalisation is continuous and dynamic, the amount and location of FDI changes overtime. Now, more MNCs are moving more advanced stages of production into the less developed countries such as some R&D being carried out in India for example. Illegal Immigration Globalisation has different effects on workers, both negative and positive aspects.

The international trade union movement has recently focused on a number of emerging themes to respond to the challenges of globalisation such as global trade unions, TUAC, WBG, UN, WHO, WTO, ILO.

Building and improving networks between trade unions around the world.

Developing creative responses to the impacts and challenges of globalisation as they get more complex.

Addressing new issues and adapting organisational structures by trade unions is the best way to meet the challenges of globalisation.

Trade unions have to deal with anti-union HRM strategies at a local level Impact on Trade Union... Impact on Trade Union Continued Impact on Wages Impact on Unemployment... Rising Labour Inequalties Issues for Workers References Morecombe Bay, 2004 Conclusion 23 Chinese Migrants Died.
Working at night harvesting Cockles.
No health and safety understanding or regulations in place. (Economist, 2004) Skilled V. Unskilled 1 - Canada and UK
2 - Austria, Belgium, Denmark, Finland, France, Germany, Italy, Norway, Portugal and Sweden
(International Monetary Fund, World Economic, Outlook, April 2007) International Monetary Fund found that globalisation has given workers in developed countries a smaller share of a growing economy.
Unskilled workers bear the brunt of the globalisation.
Income share in developed countries such as Japan has been increasing for skilled workers while the share of income going to unskilled workers has declined.
Technological changes and governmental policies also have a big impact on labour's overall share of income for both skilled and unskilled workers. Do workers benefit from globalisation? Increasing global trade, both between developed countries, and developed and developing countries combined with rapid technological change have lead to important impacts on the labour market.

Whilst globalisation and the ability for well organised firms being able to relocate creates opportunities for businesses and workers in developing countries, it can also create devaluation and redundancies for some. The exposure to MNC’s have resulted in the closure of branches such as manufacturing in western countries.

Terry, M et al (2010) agrees that the restructuring of the economy caused for workers once in manufacturing to work within the service sector or unemployed.

Touch competition in labour services and goods markets forces firms to reduce costs which can lead to restructuring and the disposal of workers.

Bloch (1998) agrees that the rise of globalisation had a negative impact on employment in Germany. He found that more than 6 million of the global workforce had no permanent job. This unemployment figure was at its peak. Technological change can also be seen as a contributory factor to unemployment. Labour power is replaced by dead labour power.

Information and communication technologies offer new ways of handling information which have lead to the restructuring and cutting down the workforce. Increased trade between countries which leads to economic growth.

MNC's are able to relocate different levels of their production around the world.
Lower production costs
Access to markets
Regulatory/tax reasons

A good example of this is Nike, who take advantage of the low production costs in Indonesia by relocating their production there.

Internationalisation of financial markets mean there is easier movement of money around the world.

Globalisation has caused the barriers to enter a market to decrease, leading to the further expansion of MNCs and has also led to the formation of more trading blocs. Outsourcing labour to cheaper countries.

The New International Division of Labour (NIDL) and the gap of the level of skilled labour around the world.

What does this means for developing countries?
Positive, long term effect for unskilled labour in the developing countries as demand for their labour increases.

What does this means for developed countries?
A positive effect for highly skilled workers. But a negative effect for the lower skilled workforce in the more developed countries as labour is sourced elsewhere.

New countries are emerging with a 'low-wage advantage' such as Bangladesh and Thailand
Meaning that countries such as China and South Korea are producing more high-tech products.
With China's high-tech exports increasing from $13.2 billion in 1990 to $381.3 billion in 2008.
And South Korea moving from $10.8 billion in 1980 to $110.6 billion in 2008. (Gryczka, 2010) There has been a huge increase in the amount of services that are produced worldwide, from $365 billion in 1980 to $3.8 trillion in 2008. (Gryczka, 2010)

Decline in production levels around the world as demand increases for services such
as banking, insurance, call centre services and investmesnt.

Very beneficial for the long term development of the less developed countries that
are involved with service production such as India. Also positive effects for higher
skilled workforce in the developed countries such as UK. Trade unions are enlarging their agendas.

Trade unions organising global campaigns.

To achieve a fair globalisation certain tools has to be used such as promotion and implementation of international labour standards.

Pressure has been put on countries which do not respect the core conventions of labour rights by the international labour movement.

IFA are a formal recognition of social partnership at the global level therefore they are a key tool used by a number of unions to lay down the rules of conduct for transnational companies. The gap in wages between more and less skilled workers has increased since globalisation has increased the demand of more skilled workers.

In manufacturing sector labour demand has shifted only in part.

There has been a substantial increase in income differences between low-skilled and high-skilled workers since the 1970s.

Real wages rose for all workers no matter the widening gap in differences.

Countries that has smaller increase inequality suffers of unemployment for less-skilled workers.

Movements of labour across countries can affect wages but it’s highly dependable on the immigration of less-skilled workers from developing countries were its able of depressing the relative earning of less-skilled natives. Impact on Productivity Lower-skilled tasks can be moved to lower (unit) cost locations.
Potential productivity gains for domestic industries.
Rising trade will coincide with rising skill-related premia.

Substitution of employment between home and host locations is more likely for cost-saving investments and the larger the host relative to the home country.

Possible implications include:
Domestic labour demand is more sensitive to domestic wages.
Employment adjusts more rapidly to changes in desired labour demand. Impact of Productivity Globalisation positive effects on productivity:

Greater specialisation in areas of comparative advantage.
Better access to foreign knowledge
Using intermediate inputs produced offshore may boost home productivity growth.
The international outsourcing of intermediate inputs can raise productivity in home economies.

Brands and lead firms argue that they are responding to the pressures of a competitive global economy, they claim that efficient suppliers are able to meet competitive commercial demands through improved productivity. Issues of workers:
Core labour rights

Employment

Wages

Working times

Health and safety Globalisation and Labour Movement: Challenges and Responses Ronaldo P. Munck Current globalisation described as "unstoppable."

Labour movements are slow to respond to changes.

"Globalisation has opened up as many doors as it has closed."

"If capital, investment and ideas should flow freely... then why not labour"

World Migration Organisation?

Minimise the ability of migrant workers to to undercut pay and conditions of indigenous workers. Marcin Gryczka's views on the International Division of Labour Creative economy; the next step in globalisation

'Creative goods';
Music
Design
Audiovisuals (movies, tv)
Arts and Crafts
Visual Arts Stable Democracies and Free Markets often lead to economic growth, higher standards of living and more employment opportunities.
Globalisation driven costs down.
Few workers prepared to work in bad conditions on a low wage in developed countries (Ray, 2007) Migration... The migration of people played a large role in the first phase of globalisation in the early 20th century.
The world is becoming a more interconnected place but the flow of people comes up against strict barriers.
The migration of people still lies at the core of the ongoing process of globalisation.
The European Union - Free movement of people. Emigration in Lithuania In 2005 there was a dispute between Irish Ferries workers and management.
Proposed plan involved the displacement of indigenous Irish workers with the replacement of Eastern European workers.
Eastern European workers were prepared to work for half the wages and much worse working conditions.
Largely disputed by trade unions and the outcome involved equalizing of working conditions for immigrants and native workers. Migration... People have always migrated in search of better opportunities.
Not a choice but an economic necessity.
Migration rates have accelerated due to globalisation.
Skilled employment opportunities are far greater in developed countries than developing as a result of globalisation.
Migrants bring many customs, practices and behaviors from home countries.
Western businesses located internationally are replacing traditional working practices with the westernised way of working.
Migrants can cause resentment as some people feel that jobs are "being taken" particularly with the current economic climate and unemployment rates.
Inequalities between developed and developing countries is creating even more restricted regulations.
Immigrant labour is often needed to support all industries and the aging populations. Changes in the Nature of Work Rise of the Service Sector Barrientos, S. (2011) “Labour Chains”: Analysing the role of labour contractors in global production networks. Brooks World Poverty Institute Working Paper 153, Manchester
Bolzane, G (2012) "Good life does not come easy in Lithuania" Press Europ, 10th February available from http://www.presseurop.eu/en/content/article/1498571-good-life-does-not-come-easily-lithuania
Ciarniene, R. and Kumpikaite, v. (2008) The Impact of Globalisation on Migration Processes, Social Research, 3 (13), pp. 42-48.
Donado, A. and Walde, K. (2012) Employment Sector; Globalization, trade unions and labour standards in the North, Geneva: International Labour Office.
Economist (2004) The Tragedy of Morecombe Bay, available from http://www.economist.com/node/2424172
Gryczka, M. (2010). ‘Changing role of BRIC countries in technology-driven international division of labour, Business and Economic Horizon, 2(2).
Held, D., A. McGrew, D. Goldblatt, and J. Perraton. (1999). Global Transformations: Politics, Economics and Culture. Polity and Stanford University Press. pp.1.
International Monetary Fund, World Economic, Outlook, April 2007 available from http://www.imf.org/external/pubs/ft/weo/2007/01/pdf/c5.pdf accessed 24/01/13
Matthew, J. and Swagel, S. and Swagel, P. (1997) The Effect of Globalization on Wages in the Advanced Economies, International Monetary Fund.
Pain, N. and Koske, I. (2007) The Effects of Globalisation on Labour Markets, Productivity and Inflation, Paris: Organisation for Economic and Co-operation and Development.
Ray, L (2007) Globalization and Everyday Life.
Verena, S. (2007) Trade union responses to globalization: A review by Global Union Research Network, Geneva: International Labour Office.
Munck, Ronaldo P. (2010) "Globalization and Labour Movement: Challenges and Responses," Global Labour Journal: Vol. 1: Iss. 2, p.218-232.
Colling, T and Terry, M (2010), Industrial Relations Theory and Practice, 3rd ed, John Wiley & Sons Ltd, United Kingdom.
Bloch, B. (1998) "Globalisation's Assault on the Labour Market: a German Perspective," European Business Review: Vol. 98: Iss. 1, p.13-24
Edwards, T and Rees, C (2011) International Human Resources Management: Globalization, National Systems and multinational companies, 2nd ed. Harlow: Pearson Education Migration... Impact on Unemployment Continued Impact on Unemployment Continued
Globalisation has enabled many companies to integrate their operations around the world, taking advantage of different levels of skilled labour.
Globalisation has led to borders opening up resulting in more movement of labour, both legally and illegally. Through choice and through economic necessity.
Globalisation changed trade unions performance.
Building more alliance between trade unions worldwide.
International labour movement using promotion and implementation as a tool to achieve fair globlolaisation.
Developed economies most dominant in these creative markets, with 90% share of the exports of creative goods.

The next stage of the NIDL and globalisation for the developing countries, much like the service sector boom.
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