Unemployment Halts Globalisation (Pros and Cons) - Essay Example

?Unemployment Halts Globalisation (Pros and Cons) Introduction This present paper seeks to discuss the pros and cons that are associated with the fact that unemployment halts globalization. This fact is based on the premise that globalization being an independent variable is negatively affected by the increase in the rate of unemployment. In order to satisfy the objective of this study, the essay will begin with a brief discussion of unemployment subsequently followed with a brief discussion of globalization. The third section will demonstrate the relationship between increased rate of unemployment and reduced levels of globalization. The fourth section before the conclusion will discuss the pros and cons of the fact that unemployment halts globalization. Unemployment With reference to the writings by Stringham and Workman (2004), they wrote that unemployment is a situation whereby people who are willing and able to work are not able to work since they do not have employment opportunities. The causes of unemployment are classified into two categories that include transitional unemployment causes and structural unemployment causes (Stone and McCraw, 2009). Under transitional causes, it is stated that unemployment is caused by temporary reasons such as; Turnover of unemployment whereby people leave their jobs to take up other jobs Casual unemployment which occurs on employees who are engaged as casual workers Seasonal unemployment, which is experienced in an industry that faces seasonal demand for its goods and services Under structural causes, Layard et al. (2005) stated that unemployment is caused by structural changes in the economy such as: Economic depression, which normally results in low demands of goods and services meaning that employment opportunities diminishes Technological changes causes unemployment to a group of employees who are not fully conversant with the operational use of the newly introduced technology Rural to urban migration, which results in urban unemployment Other causes of unemployment include: Overpopulation Lack of capital Lack of proper training and education Lack of occupational specialisation Globalisation Greenaway et al. (2008) wrote that the process of integration and interaction among various business units, local governments, and citizens of different countries, with investments and international trade acting as the driving force and is catapulted by information technology is known as globalization. Greenaway et al. (2008) further added that the integration and interaction of different economies and people of different economy has a very huge impact on the political system of these countries that integrate and interact as their cultures, environment, economic success and development are also greatly affected by globalization Godinot (2012) wrote in his book that the main distinctive characteristic of globalization is capitalism as it promotes self-sufficiency and reliance on individuals in order to enable them to become masters of their own destiny. Jagdish (2004) on his part stated that globalization is mainly concerned with making people and the market free. In addition, it is a system that allows economy to grow without any interference and with the assumption that there is no poverty and the main pillars or building blocks of globalization constitute of technology, economy, market, and capital. The relationship between unemployment and globalisation From the causes of unemployment that were listed above it can be stated that the impact of globalization also contribute to unemployment, in the sense that Dreher et al. (2005) stated globalization is facilitated by high advanced technology and relocation of people from rural areas to urban areas, which has been touted as one of the causes of unemployment. On the other hand, Nadeem (2009) stated that increased levels of unemployment result in lower demands of goods and services, which means that both local and foreign goods and services will not experience high demand thereby, mostly limiting foreign companies from venturing into the affected market, which curtails globalization. Secondly, Chossudovsky (2003) stated that a region that is experiencing high levels of unemployment definitely has low economic activities, which means that there is in adequate funds for investments and even for the facilitation of the movement of people from one region to another, which are the key drivers of globalization. Moreover, Potter (2001) lamented that a region with low economic activities will not be attractive to foreign investors, who could have otherwise set up investments in the area that could have subsequently attracted foreign workers and even introduced highly advanced technology into the region. In the writings by Gottschalk (2007), he stated that high levels of unemployment reflects undesirable economic conditions, poor market conditions, limited access to capital, and low levels of technological advancements, which have been lauded as the main pillars as well as building blocks for globalization and therefore, unemployment cannot support globalization. Pros The main advantage associated with the fact that unemployment halts globalization is interconnected with the negative impacts of globalization, which means that the region experiencing high unemployment levels will not experience these negative impacts of globalization that include; Excess participation of developed economies in the under developed economy that has high levels of unemployment Infiltration of negative cultural practices and beliefs arising from increased immigration Endangering of local companies by competitions that arise from well-financed foreign companies that are capable of producing superior and cheaper products Cons The disadvantages of the fact that unemployment halts globalization are drawn from the advantages that the region experiencing high levels of unemployment could have enjoyed because of globalization. Therefore, a region that does not experience globalization as a result of high unemployment suffers the following disadvantages; Failure to access cheaper and superior products Lack of a variety of goods and services to pick from Limited market share for local companies Lack of investments that could have created more employment opportunities Conclusion This essay has established that indeed globalization and employments are inter-related variables, for example, an increase in employment levels makes a region attractive for globalization while high levels of unemployment discourages the participation of foreign investors in the local economy, which could have created numerous advantages including creation of more employment opportunities. The pros associated with the fact that unemployment halts globalization are derived from the negatives attributes of globalization while the cons associated with this fact are derived from the advantages that could have been obtained from globalization. References Chossudovsky, M. 2003. The Globalisation of Poverty: Impact of IMF and World Bank Reforms. India: Other India Press Dreher, A. Gaston, N. and Martens, P. 2005. Measuring Globalisation: Gauging Its Consequences. London: Springer Pubications Greenaway, D. Upward, R. and Wright, P. 2008. Globalisation and Labour Market Adjustment. Basingstoke, UK: Palgrave Macmillan Godinot, X. 2012. Eradicating Extreme Poverty: Democracy, Globalisation and Human Rights. London, UK: Pluto Press Gottschalk, J. 2007. Monetary Policy and the German Unemployment Problem in Macroeconomic Models: Theory and Evidence. London: Springer Publications Jagdish, B. (2004). In Defense of Globalization. Oxford, New York: Oxford University Press. Layard, P. Layard, Nickell, S. and Jackman, R. 2005. Unemployment: Macroeconomic Performance and the Labour Market. Oxford, U.S: Oxford University Press,   Nadeem, S. 2009. “The Uses and Abuses of Time: Globalization and Time Arbitrage in India’s Outsourcing Industries”. Global Networks Potter, A. 2001. Deeper than Debt: Economic Globalisation and the Poor. Sterling, Virginia: Kumarian Press Stringham, J and Workman, D. 2004. The Unemployment Survival Guide. Gibbs Smith Publications Stone, J. and McCraw, J. 2009. Unemployment: The Shocking Truth of Its Causes, Its Outrageous Consequences And What Can Be Done About it. Bloomington, Indiana: Trafford Publishing   Read More