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Over the past three decades, globalisation has generated new challenges for labour markets as countries increasingly become integrated against the backdrop of free trade, free flow of capital, and free tapping of cheaper foreign labour which transcends nation-state frontiers (Seidman 1023). This section examines and discusses the impact of globalisation on labour.
Understanding Globalisation for Labour
Globalisation for labour is a contemporary concept which implies that the increasing integration of world economies is having a sustained effect on labour markets, in large part due to the fact that they need to tap cheaper foreign labour markets is taking a central position as the engine of globalisation (Thelen & Wijnbergen 860). This description demonstrates that, within the realms of labour market dynamics, globalisation is having an adverse effect on advanced economies and a positive effect on emerging and developing economies.
Impact of Globalisation for Labour
Firstly, globalisation has triggered a sustained competition for jobs and investment opportunities, which in turn has undermined regulation even in nation-states with sound laws and effective enforcement mechanisms (Seidman 1025). The weakening of regulation as a direct consequence of globalisation is directly related with or connected to the deteriorating labour union representation in advanced economies as multinational companies seek for cheaper foreign labour through practices such as outsourcing and off-shoring (Prempeh 201).
Globalisation is also thought to adversely affect compensation and employment practices particularly in advanced countries as firms and industries headquartered in these economies tap into the large pool of cheap foreign labour which is to a large extent sourced from emerging markets and developing countries in Asia, Latin America and Africa (Seidman 1025). Indeed, there has been an ongoing debate in advanced economies on how employee safety practices are being compromised by globalisation, and also how compensation is being cut back due to easy availability of cheap labour emanating from the emerging and developing markets. Regulation has not helped to resolve this challenge as globalisation is a complex phenomenon.
Additionally, globalisation has been directly associated with the numerous employee layoffs being witnessed in advanced economies as organisations outsource their labour from developing countries (Prempeh 201). Workers from advanced economies are increasingly losing their jobs and their sources of livelihood due to the constant threat of globalisation and trade liberalisation. On a positive note, however, these jobs are given to people in emerging and developing countries, and therefore it can be argued that globalisation has opened up opportunities for employment in these countries (Feng, Hu, & Li 1543).
Lastly, globalisation is associated with elevated international labour mobility and high levels of employee exploitation (Prempeh 199). The high levels of exploitation are a direct consequence of lack of legal protection for migrant workers in destination countries as well as a lack of decent working conditions. Most of these workers are not unionised owing to the fact that their migration is largely irregular, implying that they may be deported due to their illegal status.
Drawing from this exposition, it is evident that globalisation for labour continues to draw increasing attention as policymakers, and mainstream commentators delve on its impacts within the context of labour market dynamics. The main task for stakeholders is to come up with stronger legislation to ensure that economies reap from the benefits of globalisation while at the same time preventing shockwaves emanating from this phenomenon.
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