Advantages and Disadvantages of Opening Labour Markets on a Global Scale - Essay Example

ADVANTAGES AND DISADVANTAGES OF OPENING LABOR MARKETS ON A GLOBAL SCALE i. Introduction It is among the main objectives of every state competing on an international basis; however, achieving this does not involve a certain company being on the global rankings but also depends on the economic stature of the whole country. Today, there is no certain way to predict global markets because of promptly altering situations in different parts of the world with states such as China, Japan among others setting the bar high (Lehman 2015). All the same, it is evident that investing on a global scale is more than promising for any country because of the multiple benefits that when maximized could put any country among the leaders of the international economy. Significantly, leaders of any state dictate its position on global scale, both in politics and in the economy, relative to their knowledge and skills in exploiting opportunities and having the ability to identify threats (Weihrich 1999). Typically, these two aspects can either boost a state’s strategy or completely act as the main hindrance to its success based on how the political and economic leaders approach the strengths and weaknesses of the matter. Globalization has many facets that any country must address once they decide on participating on an international level; moreover, among the most complex areas are the labor market and employment. These areas require a certain level of understanding and experience for a state to engage or flourish. In the past, there have been more complaints than compliments from people and heads of state that have had the chance to participate in the globalization of labor due to the multiple threats and situations of disempowerment because of the harsh working conditions, poor pay and job insecurity (Edward 2014). Decisively, history and experience clearly depicts that opening labor markets on a global scale has its ups and downs with most developing states and transnational companies arguing that without vast knowledge and skills, it mostly disadvantageous. Appreciably, the possibility of setting up markets on global scale has technology advancements among others as its core facilitators; however, keeping up with these advancements is a challenge itself for most companies and states so most of them focus on global patterns of migration. Obviously, focusing on only one does not guarantee full results but most of the flourishing parties agree that the best approach is mobilizing or the necessary resources and knowledge of the global market to counter the adverse challenges and eventually exercise greater power. Definitely, this requires excellent strategies, plans and as most people would argue, connections from different parts of the globe, especially areas where labor markets dominate the economy (Hall 2009). Generally, there is a lot to labor globalization especially because most of the work entails dealing with people who need a certain depth of motivation and control to be effective enough and meet the set objectives. Past research shows that workers are more than capable in forcing concessions from employers, especially when their effort is noticeable; however, only the employers bear the task of changing the conditions that lead to this and other similar challenges (Rama 2003). The laborers mindset is only on achieving their set tasks by their supervisor and making the best out of it. Naturally, their success seems relevant only on corporate level; in fact, very few have the knowledge of the global processes. Conversely, the heads of states and companies face the most pressure because detailed knowledge of the global processes greatly affects the management once they decide on expanding to international levels that has more standards that are more complex (Flexicurity 2014). Assertively, labor globalization is very common in the modern world but achieving sustainability and meeting the set standards is hectic for everyone. However, going through the startup process can be either advantageous or disadvantageous depending on certain attributes of the proprietor such as their approach and level of labor market knowledge (Acar 2009). The discussion below entails a comprehensive analysis of the advantages and shortcomings of opening labor markets on a global scale. ii. Advantages of Opening Labor Markets on a Global Scale Definitely, the increase in trade contributes to the international development and increased employment opportunities. Today, edification is a common necessity for most people in various parts of the world because of the notion that business and education dictate the level of success for anyone. Most of the successful people agree that these two entities correlate and having one alone is less auspicious. Nonetheless, most people are in search of employment and opening up labor markets on an international level creates employment for the young unemployed people who put more effort in knowing about the global processes that the employed workers (Pettinger 2012). With such people as part of a corporations faculty, achieving organizational goals and flourishing on a global scale is very possible; in fact, the only thing left is training and additional knowledge regarding a certain field for those that lack the necessary certifications. As part of the international development community, labor markets have been facilitating the reduction of poverty over the years, and opening up one can guarantee higher chances of development for the local and international society. The first benefit would be a reduction of absolute poverty and attraction of potential investors. However, this is only probable, if a lot of time, effort and knowledge are the core aspects of planning before the opening; typically, putting all these in knowing how the global labor market works, what workers want and the best operating conditions (Sebastian 2014). Suggestively, opening up labor markets is a significant addition to the formal economy, which is where most employees want to exploit the knowledge and skills due to the hostile inadequacies that come with the informal economy. The formal economy is large hence overcoming barriers to growth that facilitate the offering of low-quality goods and services. The global market is also one of the main sources of permanent jobs that often offer fair wages and job security hence attracting workers that are more competent. Moreover, the international market laws and regulations advocate for decent working standards that are not common in the modern world, making the unemployed alert in case an opportunity pops up in the international labor markets. This is advantageous to the proprietors because they do not face hard times when searching for workers (Marc 2009). Relatively, the global markets have more financial profits as compared to the local markets due to the unlimited access. Definitely, this in itself is an advantage to a corporation but the better portion of it is that, as part of the formal sector, it has the capability of rewarding novelty as part of retaining its corporate talent, one of the core ingredients of economic accomplishment. Moreover, as part of the reward scheme, this encourages and challenges employees to take more risks in making their corporation better, which a chief source of ideas that might land them so high on the global scale. External economic shocks are not very common for most states because of the limited access to other economies; however, opening international labor markets could augment this because of the multiple production chains (Shaw 2012). Appreciably, some corporations can argue that this is possible without globalization, which is true, but the only disadvantage is that it would be very slow. However, opening labor markets can fasten the process especially with the multiple economic crises because, for starters, access is not limited to the formal market. However, this depends with what the political and economic leaders use. According to economic journals, “globalization does not necessarily involve a certain state setting up corporations or branches in distant nation, it also relates with that nation’s industrialization or development stature and pace” (Economic Online 2008). Fortunately, labor globalization can act as a remedy for poor development among other relative issues by empowering the formal sector of the nation’s economy helping it to surpass the informal sector. Once the bigger part of a country’s population have almost equal job opportunities, it contributes to social equity, which acts as a catalyst for countering informality. Additionally, equity in the society assists in the enhancement of self-motivated efficiency in the state, an aspect that informality always succeeds in slowing down. With high quality production and the ability to compete on an international scale as part of a nation’s economy, what more can it ask for as a constituent for prolonged success (Cumbers 2011). Consequently, encouraging formality for corporations and employees facilitates the raising of more fiscal revenue for a state, which in return improves their stabilization capabilities for their economy. Definitely, in achievement of all this, there is a better shot at being on the same level with the leading economic gurus such as China and so forth; noticeably, all these because of opening labor markets on global scale (Hall 2009). Generally, labor globalization can have ample benefits depending on the implemented approach, but in order for these advantages to have significant impact, comprehensive strategies to counter informality should be part of every approach. iii. Disadvantages of Opening Labor Markets on a Global Scale General globalization has some strong criticisms especially for most companies stressing on standardization and overlooking other equally significant aspects. All the same, even opening labor markets on global scale has its fair share of disadvantages starting with the common diseconomies of scale. Most people argue that it only happens to private companies but it is also a probable challenge for anyone involved in labor globalization (Pettinger 2012). For instance, once a certain corporation opens labor markets in various places around the globe; high chances are that eventually they will face complications relative to the coordination of events in the different nations’ divisions. In the recent years, there has been impressive achievement from most countries around the globe because of the increased efforts to make a mark on the international platform. In return, this has been a source of great power and impact for them hence putting any other parties interested in globalization at an awkward position. Opening labor markets on a global scale means competing with big transnational companies and nations whose economies dominate the entire world. Due to this factor, startups are the worst especially in common divisions such as the labor market, and to make it worse, on an international level (Economic Forum 2014). As much as competition advocates for justice, there is no fairness in venturing into labor globalization as a beginner, and exchange blows with multinational corporations that can adjust their territorial ventures in the blink of an eye. On the other hand, opening labor markets on a global scale can mark the start of a recession for a countries economy, especially if most of the focus is on this project. Immediately, it slows the industrialization pace, which if not addressed, will lead to a standstill ultimately eroding the economy’s production foundation (Downes 2009). Additionally, labor globalization means that some countries’ economies are dependent of others. Undeniably, once one of these countries faces an economic crisis, it will spread to other countries in no time. The idea of opening labor markets on a global scale is expedient; however, it can lead to a series of struggles if one does not evaluate the local economy before launching globalization. A country’s condition of the labor markets determines how it will do on a global scale, so if they are vulnerable, going global will make things worse; in fact, it might trigger and increase informality vastly affecting the development. Still on the local disadvantages, the influence of opening international labor markets is unpredictable; matter of fact, some workers may benefit from this and others sink as a result. Past research shows that those people who lack employment opportunities even after globalization will take on any other source of revenue available, no matter how unethical or informal. Some journals on case studies of labor globalization indicate increased security as one of the results (Shaw 2012). Reasonably, opening labor markets on a global scale is not all about having the right strategy, connections and all that, it can rebound on the local economy in worse ways than imagined. In conclusion, labor globalization has its frontrunners and underdogs hence it is best if one predicts where they are more than likely to end up before starting up. Moreover, one’s location among other attributes also matter because some places have internal flaws such as those related to migration leading to societal disunions and strains. Bibliography Acar, S. 2009, ‘Globalization and Labor Markets in the Developing World’, Vol. 5, pp.1-46 Cumbers, A. 2011, ‘Globalization, Labor Markets and Communities in Contemporary Britain’: Joseph Rowntree Foundation, viewed 14 December 2015, http://www.jrf.org.uk/sites/files/jrf/labour-markets-globalisation-communities-full.pdf Downes, A. 2009, ‘Global Economic Crisis and Labor Markets: United Nations Research Institute for Social Development, viewed 14 December 2015, http://www.unrisd.org/80256B3C005BD6AB/(httpAuxPages)/4765F342E4EDD53AC12576A2005483BB/$file/Downes.pdf Economics Online, 2008, ‘The Labor Market’: News Analysis Comment Theory, United Kingdom, viewed 14 December 2015, http://www.economicsonline.co.uk/Competitive_markets/The_labour_market.html Economic Forum, 2014, ‘The Future of Labor Market Dynamics from the Corporate Perspective’, viewed 14 December 2015, http://www.forum-ekonomiczne.pl/school-of-forum/active-young/the-future-of-labour-market-dynamics-from-the-corporate-perspective/?lang=en# Edward, A. 2014, ‘Globalization and the Labor Market’: Research on Globalization and Women, viewed 14 December 2015, http://www1.aucegypt.edu/src/globalization/labor_Market.htm Flexicurity, 2014, ‘Mobile, Dynamic and Open Labor Markets for Tomorrow, viewed 14 December 2015, http://www.da.dk/bilag/Labour_Markets_for_Tomorrow.pdf Gabriel, F. 2008, ‘Globalization and Labor Markets Outcomes- Wage, Bargaining, Search Frictions and Firm Heterogeneity’: IZA Organization, viewed 14 December 2015, http://ftp.iza.org/dp3363.pdf Hall, J. 2009, ‘Future Labor Markets- Technology Assessments’: Strategic Computing and Communications Technology, viewed 14 December 2015, http://people.ischool.berkeley.edu/~hal/Courses/StratTech09/Tech/Preso/F-labor-paper.pdf Irina, T. 2007, ‘How was the Globalization of Labor Affected the Labor Income Share in Advanced Countries?’ International Monetary Fund Working Paper, vol. 7 no.298, pp. 1–50 Lehman, R. 2015, ‘Overview of Economic, Social and Demographic Trends Affecting the US Labor Market’: United States Department of Labor, viewed 14 December 2015, http://www.dol.gov/dol/aboutdol/history/herman/reports/futurework/conference/trends/trendsVI.htm Marc, B. 2009, ‘Globalization and Informal Jobs in Developing Countries’: World Trade Organization, viewed 14 December 2015, http://www.wto.org/english/res_e/booksp_e/jobs_devel_countries_e.pdf Pettinger, T. 2012, ‘Advantages and Disadvantages of Flexible Labor Markets’: Economics, viewed 14 December 2015, http://www.economicshelp.org/labour-markets/adv-disadv-flexible-lm/ Rama, M. 2003, ‘Globalization and the Labor Market’: The World Bank, Vol. 18, no.2, pp.159-168 Shaw, W. 2012, ‘Globalization, Labor Markets and Inequality’: Carnegie Endowment for International Peace, viewed 14 December 2015, http://carnegieendowment.org/ieb/2012/02/02/globalization-labor-markets-and-inequality/9d5d Sebastian, T. 2014, ‘The Labor Market Challenges of Globalization’: Kiel Institute for the World Economy, viewed 14 December 2015, https://www.ifw-kiel.de/academy/globalization-and-the-welfare-state/the-challenges-from-globalization-for-the-labour-market Weihrich, H. 1999, ‘Analyzing the Competitive Advantages and Disadvantages of Germany with the Tows Matrix – An Alternative to Porter’s Model’: European Business Review, vol. 4, pp. 1–14 Read More