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 1970’s and the end of
Bretton-Woods , economies have
increasingly moved towards deregulation,
international trade liberalization, and
interdependence.
 There has been a dramatic shift away from
manufacturing and towards service sector
employment over the past quarter of a
century

Globalization

“The integration of countries and people of the
world” He points at the emergence of new
institutions and the growing importance of
internationally active corporations moving capital,
goods, and technology across borders. For him
globalization is governed by economic and
financial world institutions such as IMF, World
Bank and WTO. Stiglitz (2002:9)
IMPACT OF GLOBALISATION ON WORKERS
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

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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
gap been the two groups has grown
 FDI’s ,TNC’s 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
corporations or institutions to the private
sector. Example is the sale of formerly
government owned and managed water and
electric companies to private businesses.
Liberalization

Liberalization -the reduction and eventual
removal of barriers to the flow of goods,
services and capital from one country to
another. Example is the reduction or
removal of tariffs or taxes on imported
agricultural products.
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 FDI’s:
(1)the drive for higher efficiency in order to
be competitive in the global market, and (2)
the introduction of technology to raise
productivity.

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
contributed 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
especially 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
exception 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
Haiti’s GDP and 11.7% of Jamaica’s.
 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
industries. Although they can have a positive impact
on countries experiencing economic booms, such as
Trinidad and Tobago, they pose economic as well as
political problems for small and fragile economies
such as Antigua and Barbuda, where about 30% of
the labour force is made up of citizens of other
Caribbean countries.
Muti-national Corporations
Like any other profit-oriented business, MNCs
base their decision on where to produce on the
most competitive combination of (i) labor, (ii)
technology, (iii) structural advantages, and (iv)
the right 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
lower labor costs and taxes, especially in highand 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
rationalization”- after realizing two sets of
employees are doing the same job, the work
force may be reduced to avoid duplication
Impact on the Nature of work

The emergence of new technologies

In order to realize how fast and dramatic these
technical changes occur it is sufficient to remind
ourselves that it is only since the 1980s that the
computer began to enter our work and private life
to any noticeable extent. Today, practically every
second work place in many parts of the world is
affected by the ‘‘smart machine”.

One consequence of new technology has often
been noted: the switch from physical work
demands to mental, information handling,
‘‘intellective "operations with their concomitant
stressors like undue increase of mental workload.

This virtualization of work and the switch from
physical to mental activities has been labeled by
Zuboff (1984) as desensualization of work.

In the last 25 years in Europe and North
America there has been a rise in nontraditional work arrangements.

i.e. increases in the proportion of the labour
force employed part-time, and shift work,
self-employed, and in the proportion of
workers holding multiple jobs and
casual/temporary jobs

Virtual Jobs

As the WTO confirmed in one of its latest
annual report, “Firms have increasingly
relied on outsourcing across national
frontiers as a means of cutting costs and
increasing efficiency” In these cases,
foreign investment is 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
employers choose to move operations
elsewhere. Workers are therefore at a
disadvantage.
 This can place "labour" at a relative
disadvantage, in that "capital" can now
employ "labour" in different countries, at
lower cost and on a basis which can
prejudice the continuing employment of
workers in the originating country.
Feminization of Employment
Since 1980 women’s labour force growth
has been “substantially higher” than that of
men in every region of the world except
Africa
 The reason given by the UN description for
this is “the widespread perception that
female employees are more tractable and
subservient 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
using 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
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•
•
•
•
•
•
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?



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Strengthen trade union organization both nationally
and globally.
Educate member of union on impact of globalization
and it’s 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 protect 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
and skills-training programmes to enable workers
to meet the demands of the constantly changing
economic environment. In addition, technical and
vocational institutions have been restructured to
make them more relevant to the needs of labour
markets. Some countries, notably Barbados, have
expanded the curricula at the secondary level to
offer a wide range of courses in business studies,
information technology, clothing and textiles, and
industrial arts.
IMPACT OF GLOBALIZATION 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
Changing Nature of work
Work from home
Call Centre's
Virtual Jobs
•Anti-union attitude of TNCs, local
employers, and government,
•Aggressive approach toward
organized workers
•Weakening collective bargaining
agreement(CBA) power
•More Research and Development
to the viability of unions
•Emergence of Human Resource
Departments and Internal Conflict
Resolutions
•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