Impact of Globalization on Australian Labour Force - Essay Example

The impact of globalisation on the Australian labour force Executive summary The labour market across the globe has undergone massive changes due to increased globalization. Multinational companies are shifting towards those nations where labour is cheaply available. This phenomenon has created unemployment and low wage issues in many developed nations such as Australia. Technological changes and free trade agreements have further aggravated the issues existing in the labour market. The paper critically analyzes the labour market scenario existing in the markets of Australia. Importance is mainly given to the effects and changes in the labour market as a result of increased globalization. Analysis has also been done in respect of the changes experienced in the wage levels and the methods adopted by the workers to escape the crisis scenario existing in the labour market. Table of Contents Executive summary 2 Introduction 4 The scenario in Australia 4 Unemployment in Australia 6 Low wages 6 Time spend in labour force 7 Conclusion 7 Reference List 9 Introduction Labour markets have never been stable in the Organization for Economic Corporation and Development (OECD) nations such as Australia. Rapid changes in the economy and emergence of globalization have caused significant changes in the labour market. Globalization has facilitated organizations to move to nations where labour is available at cheaper rates. Investors are seen to consistently search for economical ways of production. Moreover, free trade, shared market agreements and technological innovations have rendered many labourers jobless while allowing others to prosper. Manufacturing jobs in Australia, which were unionized, have lost the union protection with the emergence of globalization. Workers are now forced to shift outside developed economies and move to less developed nations in search of job opportunities. Although globalization has led to the development of a common platform for economic growth across the world, low end workers have not been provided with many benefits. As more multinational manufacturing organizations operating in Australia are shifting to locations where labour costs are low, an increasing number of labourers are becoming jobless (Webster, Lambert and Beziudenhout, 2011). The scenario in Australia The labour market and work opportunities available in the Australian market have changed drastically in the past decade. Although manufacturing concerns have been shifting out of the Australian economy and towards cheaper production locations such as China and India, the service sector has been growing substantially in the Australian market. However the service sector has remained successful in providing mainly part time jobs than full time jobs. Many workers in Australia have been forced to take up early retirement or t start small scale businesses of their own. In order to maintain employability, many workers also considered to retrain and develop new skills. Hence it was observed that many middle-aged workers began taking up crash courses and short term study programmes so that they are able to meet the needs of the globalized modern economy. However not everyone can afford investing in studies or learning new skills as they are cost inductive options. There are few new entrants in the labour market who have remained successful at obtaining stable and long term jobs. Most workers are seen to thrive on part time jobs which do not have adequate union protection, fixed working hours or other employment benefits (Dreher, Gaston and Martens, 2008). The labour market changes in the Australian economy have been similar for both male and female employees. However in comparison to the previous situations, the conditions have become worse for the male workers as they are more keen on obtaining stable and secure jobs. A long term career with one employer is becoming increasingly elusive. As more workers are losing their jobs and the gap between jobs has enlarged, the unemployment situation existing in the market has increased. The conditions existing in the labour market have the capability of influencing the nation’s taxes and gross domestic production. The unemployment issues also aggravate the problems of income disparity. The cost living in Australia is considerably high, as in most developed nations. Hence it becomes necessary for every family to have at least two earning members so as to meet the needs of living. Alongside of the increase in unemployment and job insecurity, the costs of social welfare have also risen. Australian Government authorities have tried to improve the situations existing in the labour market through the development of employability programs and by taking the efforts to retrain workers at lower costs. Government authorities also by way of forfeiting the social security benefits are trying to maintain a normalcy in the level of employment existing in the labour market (Gruenewald and Smith, 2014). A decade back, most workers in the Australian market were seen to begin their careers by taking up low paid jobs and work their way up till they reached higher levels. This trend has changed significantly. At present workers who take up low paying jobs are seen to remain with the same tenure and work conditions for a significantly long term. Since job opportunities are low, growth prospects are seen to decline simultaneously. Earlier it was seen that the competition mainly exited for high paying jobs. Alongside of increase in the level globalization and fewer job opportunities, it was seen that a considerably large portion of workers were competing for even the low paying jobs. The disadvantage associated with such jobs is that they provide very less career advancement scope. Low paying jobs have also been made flexible by employing workers on part time basis. Many employers are seen to employ workers on temporary basis. Furthermore, new entrants in the low end job market have made existing workers redundant. The scenario existing in the labour market is seen to become more and more beneficial for employers and less beneficial for workers. The labour market in Australia is therefore becoming characterized with the phenomenon of working poor (Dreher and Gaston, 2008). Unemployment in Australia Till the end of 1980’s, unemployment rates in Australia were much lower than other OECD nations (Okkerse, 2008). However at present the unemployment levels of the nation have significantly risen and have become comparable with other OECD countries. Earlier on the market of Australia was less globalized. The government of the nation was successful in maintaining rigid control upon domestic production, imports and exports. Australia was initially able to maintain isolation from the globalized economy. Hence a strong liaison existed between the labour markets, the government and the trade union. Australia was also successful at maintaining low immigration levels of workers from other nations. However with the advent of globalized economy, immigrants from different nations had entered the Australian job market. The unemployment rates existing in Australia varies highly between age groups and communities. Majorly it is seen that unemployment levels are high amongst young people and immigrants. Due to increasing levels of unemployment, the government of Australia have tightened the eligibility for providing unemployment benefits and a variety of other social assistance programmes. In order to remove the issues associated with unemployment, the government had developed the Welfare to Work programme. Individuals who participated in the programme were removed from the unemployment statistics. Although the Welfare to Work and similar other programmes facilitated providing employment opportunities, they were not successful in providing long term solutions. Most of such jobs were temporary in nature. It is expected that with the development of more industries and the increase in the foreign investments, adequate job opportunities can be created for workers removing the existing employment issues (Okkerse, 2008). Low wages The labour market of Australia is currently characterized with low wage jobs. The fair wages system was introduced in the market of Australia in the recent times. The fair wage regulations were implemented through the trade union negotiations and were generalized amongst all similar grade and class of workers in the country. In general wages were seen to rise only when the government officials choose to increase them. Even though government officials change the regulations relating to pay levels and increase the same, employers are seen to keep wages at a minimum. The continuous lobbying practices of the employers further increase the issues existing in the labour markets (Jones, 2008). Before the Australian market was captured with globalization, trade unions played a strong role in maintaining the wage levels in the country. However as the country began to adopt globalization practices, the power of trade unions began reducing. Trade unions in many organizations became inactive and were not able to protect the rights of the workers. Trade unions membership also declined. Hence it can be stated that there existed a direct relationship between trade union membership and higher wages. Loss of subsidies on behalf of the government was also identified as potential reasons for low wages (Checchi and García‐Peñalosa, 2008). Time spend in labour force The time which labourers spent outside the labour market were estimated to be quite high in the last decade. Due to the weak development of the labour market, it was observed that a number of workers began leaving corporate jobs or taking up voluntary retirements. Many such individuals either began setting up business concerns of their own or considered migrating to other nations were the availability of job opportunities were higher. Women were seen to spend a considerably large amount of time outside of the labour market so as to be able to take care of their families. Hence it can be stated that the time spend outside the labour market was more in case of women than men. Rapid obsolescence of skills due to globalization and economic growth makes it even more difficult for workers to re-enter the labour market after a considerable amount of gap (Standing, 2010). Conclusion Even though globalization has created unemployment and low wage issues in the labour market of Australia, it has also facilitated the movement of labour. There has been a rapid increase in the number of Australian workers in the U.S and the European nations. When there is an increase in the level of foreign investments, it is observed that a number of new jobs are created. The government of Australia is therefore trying to improve the situations existing in the labour market by increasing the inflow of foreign investment. However experts are of the opinion that such investments are only profitable when new companies are set up. In case of take over’s it is generally seen that foreign multinationals downsize firms or bring in expatriate employees to replace existing employees. Under such situations, foreign direct investments do not cause many improvements in the labour market. Reference List Checchi, D. and García‐Peñalosa, C., 2008. Labour market institutions and income inequality. Economic Policy, 23(56), pp. 601-649. Dreher, A. and Gaston, N., 2008. Has Globalization Increased Inequality?*.Review of International Economics, 16(3), pp. 516-536. Dreher, A., Gaston, N. and Martens, P., 2008. Measuring globalisation: Gauging its consequences. New York: Springer. Gruenewald, D. A. and Smith, G. A., 2014. Place-based education in the global age: Local diversity. London: Routledge. Jones, A., 2008. The rise of global work. Transactions of the Institute of British Geographers, 33(1), pp. 12-26. Okkerse, L., 2008. How to measure labour market effects of immigration: A review. Journal of Economic Surveys, 22(1), pp. 1-30. Standing, G., 2010. Work after globalization: building occupational citizenship. Massachusetts: Edward Elgar Publishing. Webster, E., Lambert, R. and Beziudenhout, A., 2011. Grounding globalization: Labour in the age of insecurity. New Jersey: John Wiley & Sons. Read More