Introduction
Since the turn of the century, numerous trends have emerged in labor markets across the world due to globalization. According to experts, the global labor market has struggled to effectively deal with the consequences of globalization in terms of developing policies that protect the interest of employees (Garcia and Fares 112). Many organizations have diversified their operations in an attempt to venture into various international markets and increase revenue.
This has led to increase in the demand for labor and better skills in the workplace. Multinational organizations look for employees with a high level of cultural competency and flexibility. According to the International Labor Organization (ILO), most industrialized countries face the challenge of achieving stability and security in their labor markets. This is mainly caused by the growing culture of diversity in the contemporary workplace environments (Saint-Peter 18).
The relationship between employers and their employees has a huge impact on the stability of labor markets across the world. Employees prioritize job security and satisfaction, while employers want to get the best value from their investments through their workforce.
This scenario has led to the development of numerous policies geared towards promoting workplace experiences by employees and promoting the goals of the employer. Governments across the world have embraced the need to open up their respective job markets to foreigners, as the rising trend of companies going multinational continues to grow (Garcia and Fares 121). People have increased their desire to diversify their interests in terms of the kind of jobs they choose and their location.
The economics of labor mobility across the globe
Studies have established that most people tend to be contented with their jobs as long as they manage to meet all their immediate needs. The culture of complacency among the global workforce has been there for a long time because there were no factors to trigger a revolution (Auer 40).
Most employees do not consider the possibility of either doing another job or working in a foreign country. However, due to the high rate of globalization, governments have succumbed to the pressure of opening up their labor markets and lowering restrictions on the kind of people that can work in their economy. Globalization has also led to the creation of job opportunities across the world for both skilled and unskilled individuals (Garcia and Fares 130).
Most employers in the contemporary labor market do not restrict their search for employees within their countries. They consider qualified individuals from various parts of the world with the intention to give their business a global presence. This plays a crucial role in attracting a wider market. In addition, the need to have a highly diverse workforce also motivates employers to incorporate individuals with international exposure in their workforce (Auer 48).
Labor mobility
Experts define labor mobility as the employee ability to work in numerous industries and locations without any restrictions. It entails the flexibility of labor markets in a manner that employees can move from one employer to the other regardless of their location. It also entails the ability to do that without the need to meet certain requirements (Foders 30).
According to experts, labor is one of the key factors of production that have a huge influence on the rate of growth and development witnessed in a financial system. The concept of labor mobility plays a crucial role in economic studies, because it helps one to understand the importance of having a labor force that does not have any restrictions.
This concept is divided into two categories, namely geographical mobility and occupational mobility. According to experts, geographical mobility entails the option of an individual to work in various locations (Foders 39). A good example is an individual quitting a job in the United States of America and immediately taking up another in a country like Germany.
On the other hand, occupational mobility entails the option of an individual to change his or her occupation with ease. A good example is an individual quitting his or her job as an accountant, to start working as a media personality. Studies have established that labor mobility significantly influences the performance of employees.
This happens at both collective and personal levels. According to experts, the collective level entails a situation where employees feel the effects experienced evenly throughout the economy (Foders 40). This means that labor mobility influences economic development in a country.
The level of labor mobility affects an economy in terms of its ability to effectively address the challenges of technological advancements, achieve and exploit competitive advantages in a market, as well as creating opportunities for innovation. On the other hand, the personal level entails changes that individuals experience regardless of the way the economy is performing (Saint-Peter 34).
Studies have established that labor mobility gives employees an opportunity to increase their earnings, get more exposure in their respective jobs, and exploit their talents. According to experts, labor mobility helps to improve productivity because employees are more satisfied and happier when they are allowed to look for better wages, work locations, and opportunities to acquire new skills (Auer 62). In addition, employers tend to be interested in hiring the most talented and skillful individuals from the labor market.
Importance of geographical mobility in the labor market
Studies have established that geographical mobility has a huge impact on economic development and stability of numerous countries across the world (Winters 6). The concept of labor mobility has influenced many countries into being more hospitable to foreigners, especially towards those working for multinational corporations. From an economic perspective, this concept helps to open up a country’s economy to more investors (Foders 100).
However, it is important to note that labor mobility has both positive and negative impacts depending on the way it is applied. Geographical mobility helps to increase the supply of human labor in the market. As more organizations continue to diversify and expand their operations, the demand for more labor often increases. Therefore, when governments open up their labor markets, it allows more people to have a higher chance of getting a job (Foders 111).
However, economists argue that high supply of labor can lead to lower wages for employees if the demand for labor decreases or remains static. Most employers avoid paying high wages to their employees when there are several others waiting to work with even a lesser pay (Hanson par. 8).
Studies have also established that geographical mobility of labor can lead to an increase in the rate of unemployment. The ability of people to work in different locations definitely means that more people will be available to work (Auer 79). However, if employers fail to create demand for all the available labor, more people will have no one to work for. If this situation happens for a prolonged period of time, the rate of unemployment often increases.
However, with reliable and effective policies, geographical mobility of labor often leads to an increase in productivity. According to experts, people that enter the labor market at any particular time are either skilled or unskilled (Foders 118). Skilled laborers have the potential to increase the productivity of their organizations by complementing the efforts of the less productive and unskilled colleagues. Organizations should develop a clear balance in the diversity of their workforce by hiring skillful and highly competent individuals.
Geographical mobility of labor extends beyond the economic spectrum to incorporate other factors such as government control and security measures. In some cases where countries have restrictions on their labor market, important issues such as security threats and the need to protect the sovereignty of people supersede the economic factor (Foders 130). All countries are security conscious and may put restrictions on people from the regions they consider to be a source of threat to their peace.
According to experts, it is important for governments to consider all the challenges involved with opening their labor market to foreigners despite the fact that it helps in the growth of the economy. One of the main challenges associated with geographical mobility of labor is illegal immigrants (Saint-Peter 39). For people who fail to get work permits in their countries of choice tend to use illegal means to access their labor market.
For example, in the United States the government has been dealing with this challenge for quite some time. Experts argue that illegal immigrants have contributed a lot to some countries to act slowly in terms of allowing people from certain locations the privilege of entering their labor markets (Foders 135).
Studies have established that there are a number of strategies, which governments use to develop restrictions on the mobility of labor in and out of their market. The restrictions are mainly designed to control the rate at which a country can allow foreigners to seek jobs locally, and also manage the rate of brain drain (Foders 143). One of the strategies used by countries is development of economic agreements.
This involves development of treaties between countries that allow their citizens to seek job opportunities in their respective labor markets without any restrictions. Citizens of countries involved in the development of such an agreement tend to have special privileges such as lower taxation compared to those from other countries. Another strategy is limiting the number of visas available to people looking for jobs in a particular period of time (Saint-Peter 50).
This means that there are only a certain number of visas that can be given to people from a certain country seeking job opportunities within the specified period. This is most effective when they consider membership to regional or continental bodies such as the European Union (EU) (Saint-Peter 56). For example, people from countries that are member states of the EU can have more visas compared to those from countries that are not member states.
Importance of occupational mobility in the labor market
Studies have established that the ability of employees to work in numerous industries plays a crucial role in the speedy development of a country’s economy. Experts argue that occupational mobility creates room for specialization within the workplace. Zero occupational mobility would limit people from being innovative, thus lowering the rate of economic development and job creation (folders 178).
Encouraging occupational mobility helps to boost economic growth in three major ways. First, it helps to increase the supply of labor because of enhanced flexibility. It becomes easier for employees to get jobs in different industries, thus increasing the number of options available to employers. In such a situation, there is never a shortage of labor because the demand is effectively met.
Secondly, occupational mobility can lead to lower wages for employees (Foders 183). This is mainly due to a high supply of labor caused by the ability of employees to work in numerous industries. According to experts, a high supply of labor and a low demand for it leads to lower wages in order to achieve equilibrium.
Thirdly, occupational mobility allows for the burgeoning industries to grow due to availability of enough expertise and labor. This eventually leads to increased productivity due to the reorientation of the economy towards creating new industries (Foders 200). Although occupational mobility is good for economic development, it is important for governments to ensure that there are regulatory measures that will guarantee stability in the market (International Labor Office 100).
It is important to have regulatory measures because the free flow of labor between industries can easily lead to the collapse of another. According to experts, the restrictions are very important in regulating the flow of labor, especially in industries that require specialized training. For example, there ought to be restrictions on the mobility of labor in the healthcare industry.
This industry requires individuals with specialized training, thus certain people cannot exit or enter the industry (International Labor Office 109). This explains the reason why people working in industries that require specific skills have higher wages compared to those in industries that have less restrictions. Restrictions on occupational mobility are achieved through strategies such as licensing, specialized training, and specific education achievements among others (Foders 216).
Effects of globalization of production on the labor market
Studies have established that globalization has changed the manner of interaction between countries in terms of enhancing labor mobility and increasing productivity. Experts argue that countries tend to strengthen their relationships when there is a constant flow of goods and resources between each other (Blossfeld 214). Globalization of production has played a crucial role in promoting the concept of labor mobility, especially across various geographical locations.
Globalization has created the need for increased production and more labor as various industries continue to develop. It has created a scenario in which one country produce goods and services to meet the needs of people in a different country (Hanson par. 12).
The current economic setting has influenced most organizations into diversifying and expanding their operations to international markets. Organizations seek to make good profits by lowering the cost of production and developing new products that can help them acquire a global appeal (Blossfeld 229).
For example, there are numerous organizations that have set up their production plants in China and other Asian countries. The reason for this decision is that the cost of production in China is lower due to availability of enough labor at competitive market rates (Winters 16).
This has obviously affected the labor market in terms of the demand for personnel and competency levels required. Globalization of production has influenced the way many organizations in the contemporary world make important decisions such as the location of the industries, their structure, and source of labor.
The main idea behind the concept of globalization of production has been the need to separate intensive operations from the less intensive ones in order to manage costs. Organizations have discovered the economic value of outsourcing labor in countries where the supply is high but the demand is quite low (International Labor Office 122). According to experts, separating production activities depending on the intensity of skills required has affected the trends in the global labor market very much.
The demand for both skilled and unskilled labor has been altered along with the wage structure, which depend on the level of restriction on labor mobility in respective industries. Experts also argue that people tend to have a preference for employers based in countries that have blossoming economies (Blossfeld 246).
This means that if industries outsource for labor and resources from outside, some countries will have a weak economic system and low level of productivity. The productivity patterns being taken by industries in the contemporary economic setting have led to increased inequality in terms of wages paid to both skilled and unskilled laborers (Winters 21).
Studies indicate that over the last three decades, the gap in wages between these two categories of laborers has been growing. This challenge has been attributed to increased trade, globalization of production, and geographical mobility of labor. Some experts have attributed this challenge to the high rate of technological growth, which has resulted in human labor being replaced by electronic tools (Blossfeld 260).
Most employers have turned to technology for most of their needs due to its efficiency and cost effectiveness. This has been experienced a lot in industrial countries where much of the production work is done using machines and little human labor input.
However, one of the things that many people have not considered in regard to the effect of globalization of production has been the possible increase in demand for skilled labor. If this happens, the most probable outcome is extremely low wages for unskilled labor and major instability in the global labor market (Garcia and Fares 179).
Conclusion
Labor mobility is one of the main consequences of globalization that countries have to deal with in the 21st Century. Globalization has led to the creation of job opportunities across the world for both skilled and unskilled individuals. Most employers in the contemporary labor market do not restrict their search for employees within their countries. Many workers around the world have benefited due to their ability to work in different geographical locations and industries without many restrictions.
Countries that have been quick to embrace this concept have experienced an increase their rate of production. The concept of labor mobility has influenced many countries into being more hospitable to foreigners, especially towards those working for multinational corporations. From an economic perspective, this concept helps to open up a country’s economy to more investors. According to experts, productivity often increases when laborers have more skills, better wages, and are satisfied with their jobs.
Works Cited
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