The Impact of Globalization

on Labour

By: Farmala Jacobs

Overview
Introduction
What

is Globalization?
Impact of Globalization on workers and
employment
Social and Economic Impact
Changing Nature of Work
Impact on Trade Unions
What can be done?

Introduction
Since

the early 1970s and the end of

Bretton-Woods , economies have increasingl
y moved towards deregulation, international
trade liberalization, and interdependence.
There has been a dramatic shift away from
manufacturing and towards service sector e
mployment over the past quarter of a centur
y

Globalization
The

integration of countries and people of the

world He points at the emergence of new instituti
ons and the growing importance of internationally
active corporations moving capital, goods, and tec
hnology across borders. For him globalization is g
overned by economic and financial world instituti
ons such as IMF, World Bank and WTO. Stiglitz (
2002:9)

IMPACT OF GLOBALISATION ON WORKERS

Informalisation of formal sector

Privatisation causing millions of workers jobless and
cut down of public services
TNCs apply effectiveness system:
piece-rate
multi-skill [service sector]
Deregulation of private sector
Closing down of factories
Media being used as a tool against trade union
movement
Create inequality among people and nations leading to
social unrest
Increasing working hours

Impact on Employment
Flexible

work environment - working from

home and online systems
Feminization of Labour
Greater demand for skilled workers at the
expense of the un-skilled and the income ga
p been the two groups has grown
FDIs ,TNCs and trade liberalization lead
to job losses
Privatization also leads to unemployment

Privatization
Privatization

is the total or partial sale of

government-owned or controlled corporatio
ns or institutions to the private sector. Exam
ple is the sale of formerly government owne
d and managed water and electric companie
s to private businesses.

Liberalization
Liberalization

-the reduction and eventual

removal of barriers to the flow of goods, ser
vices and capital from one country to anoth
er. Example is the reduction or removal of t
ariffs or taxes on imported agricultural prod
ucts.

Foreign Direct Investment

Creates

large numbers of new jobs but also

causes job destruction
The ILO offers two reasons for rising
unemployment as a direct result of FDIs: (1
)the drive for higher efficiency in order to b
e competitive in the global market, and (2) t
he introduction of technology to raise produ
ctivity.

 ILO

notes that job losses have fallen most

heavily on unskilled workers.
FDI in the services sectors in Barbados,
Jamaica and the OECS countries has contri
buted to job creation. The tourism industry
has emerged as one of the largest employers
in many Caribbean countries.
However, the positive contribution of FDI
to job creation may have been offset by job
losses in the manufacturing sector especiall
y in Jamaica, owing to trade liberalization.

Role of Remittances
A major

effect of labour migration has been

the growing role of remittances
These flows have been significant in Haiti,
Jamaica and the OECS countries with the ex
ception of A&B.
This has been facilitated by the development
of more efficient intermediation channels,
such as electronic funds transfers.

 Remittances

have grown in both absolute

and relative terms.
By 1999, such flows represented 17% of
Haitis GDP and 11.7% of Jamaicas.
Remittances have also been significant in
Grenada and in St. Kitts and Nevis (ECLAC,
1998f).

 Migrant

labour tends to flow from lower-income to

higher-income countries (for example, from Haiti to
the Bahamas and the Dominican Republic and from
Guyana to Trinidad and Tobago).

Migrant

workers are mainly unskilled agricultural

workers or workers in construction and service indus
tries. Although they can have a positive impact on co
untries experiencing economic booms, such as Trini
dad and Tobago, they pose economic as well as polit
ical problems for small and fragile economies such a
s Antigua and Barbuda, where about 30% of the labo
ur force is made up of citizens of other Caribbean co
untries.

Muti-national Corporations
Like any other profit-oriented business, MNCs
base their decision on where to produce on the m
ost competitive combination of (i) labor, (ii) tech
nology, (iii) structural advantages, and (iv) the rig
ht business environment, which includes among
others, low profit taxes and political stability.
It is well documented that at least the 1990s saw
an intensification of a competitive pressure to lo
wer labor costs and taxes, especially in high- and
middle-income countries
o

Mergers and Acquisitions

M&A which

represent genuine expansion or

product development may lead to job
creation in the long term
On the other hand, M&A can lead to job
losses through post-acquisition rationalizat
ion- after realizing two sets of employees a
re doing the same job, the work force may b
e reduced to avoid duplication

Impact on the Nature of work

The
In

emergence of new technologies

order to realize how fast and dramatic these

technical changes occur it is sufficient to remind o
urselves that it is only since the 1980s that the co
mputer began to enter our work and private life to
any noticeable extent. Today, practically every sec
ond work place in many parts of the world is affec
ted by the smart machine.

 One

consequence of new technology has often

been noted: the switch from physical work deman
ds to mental, information handling, intellective "
operations with their concomitant stressors like u
ndue increase of mental workload.

This virtualization of work and the switch from

physical to mental activities has been labeled by Z
uboff (1984) as desensualization of work.

 In

the last 25 years in Europe and North

America there has been a rise in non-tradition
al work arrangements.

i.e.

increases in the proportion of the labour

force employed part-time, and shift work, sel
f-employed, and in the proportion of workers
holding multiple jobs and casual/temporary j
obs

Virtual

Jobs

 As

the WTO confirmed in one of its latest

annual report, Firms have increasingly reli
ed on outsourcing across national frontiers a
s a means of cutting costs and increasing eff
iciency In these cases, foreign investment i
s almost certain to lead to job losses.

Easy Come, Easy Go

Workers

are unable to move with the same

ease as capital, are faced with insecurity if e
mployers choose to move operations elsewh
ere. Workers are therefore at a disadvantage.
This can place "labour" at a relative
disadvantage, in that "capital" can now emp
loy "labour" in different countries, at lower c
ost and on a basis which can prejudice the c
ontinuing employment of workers in the ori
ginating country.

Feminization of Employment
Since

1980 womens labour force growth

has been substantially higher than that of
men in every region of the world except Afr
ica
The reason given by the UN description for
this is the widespread perception that fema
le employees are more tractable and subserv
ient to managerial authority, less

 prone

to organize into unions , more willing

to accept lower wages, less likely to except
upward job mobility and easier to dismiss us
ing life-cycle criteria such as child birth and
marriage.

However

women have been the first to lose

their jobs in times of retrenchment.

IMPACT ON UNION
Anti-union attitude of MNCs, local employers,
and government,
Aggressive approach toward organized
workers
Weakening CBA power.

IMPACT ON WORKERS
No social security
No job security
Minimum wage is not respected
Cut down of the real wages
Create devastating unemployment
Working in unhealthy and inhuman working
condition
Family life is ruin
women and children are the worst placed
Trafficking and migration of labour within and
out countries

What can be done?

Strengthen trade union organization both

nationally and globally.
Educate member of union on impact of
globalization and its consequences.
Equip members with necessary skills.
More Research and development on the
impact of globalization, corporate practice.
Build alliances with other partners such as
NGOs, civil society, and people movement.

WHAT TO DO

End to unfair wage practices, i.e. piece rate

wages.
Lobby and pressure on legislators to respect
ILO conventions and recommendations to prot
ect workers rights.
Strengthen the fight politically to face the
devastating impact of Globalization.
Create mass opinion against unfair trade
agreement and financial arrangement.
Create awareness among people at the large.
Joint global pressure to ensure social security
schemes.

What can be done?

To mitigate the impact of Globalization on labour,

Caribbean countries have introduced educational a

nd skills-training programmes to enable workers to
meet the demands of the constantly changing econ
omic environment. In addition, technical and vocat
ional institutions have been restructured to make th
em more relevant to the needs of labour markets. S
ome countries, notably Barbados, have expanded t
he curricula at the secondary level to offer a wide r
ange of courses in business studies, information tec
hnology, clothing and textiles, and industrial arts.

IMPACT OF GLOBALIZATION ON WORKERS

Anti-union attitude of TNCs,

local employers, and
government,

Informalisation of formal
sector
ON
T
Aggressive approach toward
C
Privatisation causing millions
A
P
organized workers
of workers jobless and cut do
IM ION
Weakening collective
wn of public services
UN
bargaining agreement(CBA)
TNCs apply effectiveness
power
system:
More Research and
piece-rate
Development to the viability
multi-skill [service sector]
of unions
Deregulation of private sector
Emergence of Human
Closing down of factories
Departments and
NoResource
social security
Media being used as a tool
IM
Conflict Resolutions
NoInternal
job security
against trade union movemen W PA
Minimum wage is not respected
OR CT
t
KE ON Cut down of the real wages
Create inequality among
RS
Create devastating unemployment
people and nations leading to
Working in unhealthy and inhuman
social unrest
working condition
Increasing working hours
Family life is ruin
women and children are the worst
Changing Nature of work
placed
Work from home
Trafficking and migration of labour
Call Centre's
within and out countries
Virtual Jobs