Global workforce

Source: Wikipedia, the free encyclopedia.

Global workforce refers to the international labor pool of workers, including those

contingent workforce or other precarious work.[1] As of 2012, the global labor pool consisted of approximately 3 billion workers, around 200 million unemployed.[2]

Structure of global labour

New international division of labor

Main article: New international division of labour

The global workforce, or international labor pool, reflects a new international division of labor that has been emerging since the late 1970s in the wake of other forces of

employers
think about and utilize labor are changing. Usually, barriers come into play such as different laws.

Labor supply

Main article:
Labor force

The global supply of labor almost doubled in absolute numbers between the 1980s and early 2000s, with half of that growth coming from Asia.[3] At the same time, the rate at which new workers entered the workforce in the Western world began to decline. The growing pool of global labor is accessed by employers in more advanced economies through various methods, including imports of goods, offshoring of production, and immigration.[4] Global labor arbitrage, the practice of accessing the lowest-cost workers from all parts of the world, is partly a result of this enormous growth in the workforce. While most of the absolute increase in this global labor supply consisted of less-educated workers (those without higher education), the relative supply of workers with higher education increased by about 50 percent during the same period.[4] From 1980 to 2010, the global workforce grew from 1.2 to 2.9 billion people. According to a 2012 report by the McKinsey Global Institute, this was caused mostly by developing nations, where there was a "farm to factory" transition. Non-farming jobs grew from 54 percent in 1980 to almost 73 percent in 2010. This industrialization took an estimated 620 million people out of poverty and contributed to the economic development of China, India and others.[5] The Institute estimates that increased exports in developing countries contribute to one-fifth of non-farm jobs in those nations and that immigrants from developing countries contributed to 40 percent of the workforce in advanced ones. By 2008 foreign-born workers accounted for 17 percent of all STEM (science, technology, engineering and math) positions in the United States.[5]

Employment and unemployment

Unemployment by country, 2010
Main article: Employment

Employment is growing fastest in emerging and developing economies. Over the past 5 years, the incidence of long-term unemployment (the share of unemployed persons out of work for 12 months or more) has increased 60% in the advanced and developing economies for which data exist. Global unemployment is expected to approach 208 million in 2015, compared with slightly over 200 million in 2012.[2]

From January 2012 to January 2013, Italy experienced the largest increase in its unemployment rate (+2.1 percentage points), followed by the Netherlands (+1.0 percentage point), and France (+0.6 percentage point). Over that same period, Canada experienced the largest decrease in its unemployment rate (−0.5 percentage points), followed by the United States (−0.4 percentage point).[6]

The number of people employed in

contingent workforce jobs.[7]

Demographic trends

Median age by country, 2015
Main article: Demographics of the world

These numbers show that, globally, the structure of the workforce has been changing. In addition to the economic and social factors described above, a large part of this restructuring is also due to

communicable diseases and, overall, life expectancies are much longer while birth rates are lower.[8] In these areas, the overall median age is rising (see List of countries by median age). The youngest populations, primarily those in Southeast Asia and Africa
, are those in which overall life expectancies are lower—many children and some adults still die from communicable diseases—but the birth rate is also high.

Global worker mobility

The movement of individuals across

expatriates to more recently identified groups such as self-initiated expatriates, international business travelers, international commuters, and "flexpatriates" (short-term assignees and international commuters).[10][11][12]

Movement of people across national borders is becoming increasingly common. Traditionally, this has been described in terms of push and pull forces that drive

students, or other expatriates.[15][16] Such movements of people may influence interstate relationships concerning politics, economics and culture. Thus, global workforce mobility research is relevant to both host and home country policies. From a focus on longer-term and assigned expatriation, current research is focusing on the drivers and dynamics of a range of new alternative forms of global mobility in the workforce.[9] Reviews on global workforce mobility have been recently published by Caligiuri and Bonache,[17] and Collings and Sheeran.[18]

Implications

Social vulnerability

One issue related to the shift of employment to countries with an overall younger population has to do with the dependency ratio in differing countries. The dependency ratio is an age-population ratio of those typically not in the labor force (the dependent part) and those typically in the labor force (the productive part). A high dependency ratio can cause serious problems for a country if a large proportion of a government's expenditure is on health, social security & education, which are most used by the youngest and the oldest in a population. The fewer people of working age, the fewer the people who can support schools, retirement pensions, disability pensions and other assistances to the youngest and oldest members of a population, often considered the most vulnerable members of society.

Downward pressure on wages

Another issue can arise in regard to the capital-labor ratio in the global population. Freeman (2010) holds that the new entrants to the global workforce since the 1980s brought little capital with them, either because they were poor or because the capital they had was of little economic value.[3] He estimates that the entry of China, India and the Eastern Bloc into the global economy cut the global capital-labor ratio to around 55–60% of what it otherwise would have been. The capital-labor ratio, according to Freeman, is a critical determinant of the wages paid to workers and of the returns to capital. The more capital each worker has, the higher will be their productivity and pay. Even considering the high savings rate of new entrants—he cites World Bank estimates that China has a savings rate of 40% of GDP—he estimates it would take 30 or so years for the world to re-attain the capital-labor ratio among the countries that had previously made up the global economy. This, along with the effects of the Great Recession, could mean that downward pressure on wages and compensation, particularly in more advanced economies, will continue for the foreseeable future.

Race to the bottom

Main article: Race to the bottom

"Race to the bottom" is a phrase coined to describe the potential outcome of companies searching for the lowest-cost in all their business needs. For example, lowest taxes and tariffs, land, materials, labor, etc. In terms of global labor arbitrage, the lowest-cost labor is often found in countries that have the fewest protections for workers. Such protections, collectively known as

guest workers at lower wages in order to decrease the overall domestic standard wage for workers in a given occupation, such as with Information technology workers in the United States.[19]

Mitigating factors

However, other forces may mitigate these processes. Some observe that a growing number of

SARS hits Asia or when an earthquake hits Japan, supply chains are disrupted. Also, as emerging economies boom, wages there are rising. The benefits of global labor arbitrage may disappear, particularly in basic manufacturing and especially in China, where wages have been rising the fastest.[20]

See also

References

  1. ^ James, Paul; O’Brien, Robert (2006). Globalization and Economy, Vol. 4: Globalizing Labour. London: Sage Publications.
  2. ^
    ISBN 978-9292510183
    .
  3. ^ a b Freeman, Richard (2010-03-05). "What Really Ails Europe (and America): The Doubling of the Global Workforce". The Globalist. Retrieved 2013-07-06.
  4. ^
    ISBN 978-0511760594
    .
  5. ^ a b Dobbs, Richard; Barton, Dominic; Madgavkar, Anu; Labaye, Eric; Manyika, James; Roxburgh, Charles; Lund, Susan; Madhav, Siddarth (June 2012). "The world at work: Jobs, pay and skills for 3.5 billion people". McKinsey Global Institute. {{cite journal}}: Cite journal requires |journal= (help)
  6. ^ Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, International unemployment rates, January 2013 on the Internet at http://www.bls.gov/opub/ted/2013/ted_20130308.htm (visited October 28, 2014).
  7. ISBN 978-1841136158
    .
  8. ^ World Population Data Sheet (PDF). Population Reference Bureau. 2012. Archived from the original (PDF) on 2014-05-21. Retrieved 2013-07-08.
  9. ^
    ISBN 9781452256726.{{cite encyclopedia}}: CS1 maint: multiple names: authors list (link
    )
  10. ^ Makela, L., K. Sarenpaa and Y. McNulty (2016). "Flexpatriates, short-term assignees and international commuters". In McNulty Y.; J. Selmer (eds.). The Research Handbook of Expatriates (Forthcoming). Edward Elgar.{{cite encyclopedia}}: CS1 maint: multiple names: authors list (link)
  11. S2CID 143790254
    .
  12. ^ "Global Mobility Journeys (GMJ): Global Mobility HR First". Global Mobility Journeys. Retrieved 2022-10-15.
  13. S2CID 56210528
    .
  14. doi:10.1002/hrm.21610
    .
  15. S2CID 154790453
    .
  16. doi:10.1108/JGM-01-2013-0006
    .
  17. ISSN 1090-9516
    .
  18. S2CID 234345248
    .
  19. ^ Salzman, Hal; B. Lindsay Lowell (24 July 2013). "The Bogus High-Tech Worker Shortage: How Guest Workers Lower US Wages". PBS. Retrieved 25 July 2013.
  20. ^ "Moving back to America: the dwindling allure of building factories offshore". The Economist. 12 May 2011. Retrieved 8 July 2013.

Further reading

External links

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