The Impact of Globalization on the Labor Force in Australia - Case Study Example

The Impact of Globalization on the Labor Force in Australia Name Student ID Course Instructor Date The Impact of Globalization on the Labor Force in Australia Executive Summary Australia made record s the world’s riches country in the year 1890. The mineral mining and flocks of merino sheep attracted a lot of international attention which opened Australia to globalization. Globalization has had various effects on the Australian economy such as; leading to increased demand for skilled labor; increased economic development through trade transformation; attraction of foreign investors; improved country’s ability to integrate technology in various sectors such as bank and financing institutions. One of the most significant effects of globalization is that Australia does not have any restrictions on the movement of labor in and out of the country. Hence, Australia experienced a huge change in the composition of different businesses and industries encompassing the workforce. There is increasing shortage of skilled labor in the country due to emigration. Australia is highly dependent on immigration to increase the workforce level. The Australian government has enacted some policies which aim at increasing level skilled labor in the country. Introduction Globalization refers to the process of international amalgamation which results from the exchange of global views, goods and services, thoughts, and other features of culture. The main aspects of globalization include; transportation, telecommunication, telegraphs, and the internet. The origin of globalization is not clearly defined; however, some people have traced it in the late 19th century and untimely 20th century. The world’s economies are connected (Bond & Gaston 2011). In the year 2000, the International Monetary Fund described the major aspects of globalization as business and commerce, resources and venture, immigration, and distribution of information. This paper seeks to address the impact of globalization on the Australian labor force. Origin of Globalization in Australia During the 19th century, the Australian populace and affluence increased hastily. In the year 1890, Australia made record as the richest country, per capita, in the world. Afterward, the wool costs crumpled, there was the bank collapse followed by the land-boom failure in Victoria. It was followed by the Federation Drought which is up to date regarded as the most horrible events in Australia after the European settlement. However, Australia was still rich according to the world’s standards. The gold mining in the WA led to development of employment and excellent income to people who migrated there from the whole of Australia and from other regions of the globe. Australia was considered the most prosperous because the presence of a wide range of minerals, and massive flocks of merino sheep that was left by Britain, a legal system which was in support of economic development (Heymann, Earle & McNeill 2013). These factors contributed to the involvement of Australia in the global environment and its businesses started competing at global levels. There have been attempts to augment the regulatory burden on the Australian employees but it is anticipated to end after a short period of time. The reason from this is that Australia is a major participant in the global market and the only individual who benefit from this regulation are the police, nurses, teachers, and other people who work within the health sectors. These fields are the only that still uphold unionism. The main debate of the advocates was that there was the need for development of regulations which aim at protecting Australian workers from unjust competition of cheap labor that result for globalization. Unless a fortress Australia is being developed, the competitive pressures from the globe ought not to be disregarded (Schmitt & Mitukiewicz 2012). Effect of globalization Globalization has various effects on an economy such as; leading to increased demand for skilled labor; increased economic development through trade transformation; attraction of foreign investors; improved country’s ability to integrate technology in various sectors such as bank and financing institutions (Bond & Gaston 2011). One of the most significant effects of globalization is that Australia does not have any restrictions on the movement of labor in and out of the country. Due to the high demand for skilled labor in the globe, most of the people move to work abroad. This occurrence is common in Australia where citizens leave the country to work in other countries. Many of the people who leave Australia to work overseas are highly qualified. Australia also receives a wide range of skilled labor internationally. The free entry of labor in and out of Australia is a consequence of globalization. International migration has been attributed to lack of entry restrictions. A country’s labor flows play a very significant role in the economic development; hence, lawmakers ought to ensure that domestic markets have the capability to attract skilled labor internationally (Paik, Chow & Vance 2011). Changes in the Composition of Demand for Highly Skilled Workers in Australia By the year 2001, Australia experienced a huge change in the composition of different businesses and industries encompassing the workforce. Some industrial sectors failed while some flourished. During this period, the employment proportion of the Agricultural, fishing, and forestry sector declined significantly. The mining industry also experienced a drop of the employment share of about 36%. Nevertheless, various industries had a significant increase in the number of employment share. Such sectors include; the finance sector, hotel sector, and the health sector. The finance and the accommodation sector had a growth of 75.9% (Schmitt & Mitukiewicz 2012). There was an increase in the level of skilled labor in nearly all industrial sectors. The highest increase was experienced in the Education sector which had an increase of 25.8% in comparison to previous decades. The Health sector and other public service sectors experienced an increase of over 21.4 % during this period. Typically, skilled labor increased by 12.70% in Australia. This resulted from the increase in the number of individuals holding bachelors degree. The number of university graduates increased from 2.78 to 9.74 in the year 2001. Nevertheless, this rapid increase of the number of skilled labor was not sufficient to cater for the increased demand of highly skilled labor in the country (Heymann, Earle & McNeill 2013). Globalization has made a very great contribution in the increment of the level of highly skilled labor in the country. However, the country ought to consider other means such as increased population growth and discourage the outflow of skilled labor to other countries. Immigration and Emigration Effects The overall overseas migration is a factor that ought to be considered when dealing with skilled labor shortage in Australia. This figure is arrived at by comparing the number of skilled workers who leave permanently or long term to the number of skilled workers arriving for permanent or long term basis (Bond & Gaston 2011). In the year 1981, the overall overseas migration was around 30000, which was roughly 17.80 of the total population growth. This figure has increased gradually and currently it is estimated to be 53% of the total population growth. The figures demonstrate an increase in the migration programs in Australia that results from globalization. Australia is highly dependent on immigration for increased workforce. Immigration has affected the age structure of Australia since the net overseas migrants are not similar to the Australian population. Statistics prove that migrants are younger and have more excellent skills than the Australian population. Hence; immigration has lowered the average age and increased the level of skilled labor in the country. However, overreliance on immigration for age reduction is not advisable because large percentage of immigration would be necessary to experience notable effects on the age reduction in the labor force (Paik, Chow & Vance 2011). Emigration has also played a very significant role in the Australian work labor force. Emigration is thought to lead to the labor inadequacy in Australia. Another concern is the Australian government has no power to control the level of emigration in the country. Globalization has eased the migration of individuals from one country to the other. It has led reduced travel costs, development of telecommunication, removal of policies restricting immigration and emigration. Emigration has greatly increased in Australia and 50,500 people are estimated to leave Australia permanently yearly. Most of the emigrants are Australian born and the trend is believed to continue due to increased globalization and the current increasing demand for qualified workers. Australia-born emigrants who leave Australia have economy as the major reason. 62.3 % of the emigrants who leave permanently are employed before leaving. The largest group of this includes the professionals who represent 25.5 % of the total departures. Managers and administrators are second with 11.5% followed by sales and services specialists with 13.7 % (Paik, Chow & Vance 2011). Responses by the Australian Government The Australian government launched the Skilled Category of Migration Program which aims at targeting migrants who are highly skilled and unique capabilities that will contribute to economic growth (Heymann, Earle & McNeill 2013). Migrants ought to pass a particular intelligence test and have specific work qualifications. An individual may also be nominated by specific Australian employers or have accomplished business skills that will contribute to economic growth. Migrant Training Programs was also launched. It enables Australian organizations to bring skilled people from overseas for tailored trainings (Bond & Gaston 2011). It enables migrants to receive academic and practical training so as to deal with the increased demand for skilled labor. Conclusion Globalization starts when a country agrees to eliminate the policies that restrict trade, labor movement, and information flow in and out of the country. With the increased levels of globalization, Australia has proved to be a knowledge based economy through technological advancements and evolution of the market and social setting. Hence, the demand for skilled labor has increased rapidly at a rate that the native labor force would not satisfy. Globalization has resulted to development of international companies that relocate staff within the company; it has greatly contributed to labor mobility. However, Australia gains a lot skilled labor through immigration. The Australian government has introduced some policies which aim at attracting skilled labor into the country. Such policies include the testing of intelligence level prior to being offered a permanent visa to Australia. I would recommend that the Australian government ought to work together with companies so as to increase wages for skilled workers in the country which will be very significant in prevention of labor outflow due to economic reasons. Also, the Australian government ought to establish some policies which aim at regulating level of labor outflow amongst inborn citizens. Such policies would include prohibiting international companies from making unnecessary relocations. Bibliography Bond, M & Gaston, N 2011, ‘The Impact of Immigration on Australian‐born Workers: An Assessment Using the National Labour Market Approach*,’ Economic Papers: A journal of applied economics and policy, vol. 30, no. 3, pp. 400-413. Heymann, J, Earle, A & McNeill, K 2013, ‘The impact of labor policies on the health of young children in the context of economic globalization,’ Annual review of public health, vol. 34, no. 1, pp. 355-372. Paik, Y, Chow, HIS & Vance, CM 2011, ‘Interaction effects of globalization and institutional forces on international HRM practice: Illuminating the convergence‐divergence debate. Thunderbird International Business Review, vol. 53, no. 5, pp. 647-659. Schmitt, J & Mitukiewicz, A 2012, ‘Politics matter: changes in unionisation rates in rich countries, 1960–2010,’ Industrial Relations Journal, vol. 43, no. 3, pp. 260-280. Read More