Globalization and Labor Term Paper Example | Topics and Well Written Essays - 2500 words

Globalization and Labor - Term Paper Example Along with this, several other factors like the removal of restrictions and limitations over the capital flows and the trade across border, and the rapid advancement in the technology have enabled the production processes to be scattered. The number of products and services is rapidly increasing, but they are situated far away from the target markets. The production sites have become increasingly alert to the relative cost of labor across various countries. Every year, more and more people are migrating across borders, both legally and illegally. This has given boost to the process of globalization. Particularly, the labor market is becoming increasingly globalized. This matter has drawn the attention of media and policymakers towards itself, specifically in advanced economic regions. The question that is of the biggest concern from the resulting situation and that this paper aims at answering is, if the massive in-pour of labor from the underdeveloped countries into the developed co untries is damaging the employment and compensation trends in their economies? This paper will also explore the rate of growth of the labor supply across borders in the recent years and the specific channels that have played a special role in promoting the globalization of labor. These form important aspects of the aforementioned question. Increase in the supply of global labor: In order to determine how globalized labor in the contemporary age is, it is imperative that the effect of progress of such Eastern countries as India and China on the global labor supply is studied. This requires estimation of the participation of these countries’ labor force in the global market. This can be achieved by examining the ratio of export-to-GDP in these countries. The effective supply of global labor has quadrupled in the 25 years from 1980 to 2005 (IMF 162). The increase in global labor supply particularly occurred after 1990. Although most of the increase in the labor supply across the world that has occurred in the recent years pertains to the movement of workers that have not attained higher education, yet there has also been a noticeable increase in the supple of workers that have formally attained higher education. According to an estimate, the global supply of such workers has increased by 50 per cent in the past 2.5 decades (IMF 162). Advanced economies may estimate the increase in the supply of global labor merely by reviewing the increase in demand of imports, or by reviewing the trends of immigration. A comparison of countries with respect to the impact of globalization: Impacts of the labor globalization have been most significant in the European countries and the Anglo-Saxon countries. According to (New Economist), globalization has generally caused a reduction in the labor’s share in the GDP: However ...In Anglo-Saxon and smaller European countries, labour-market policies have partially offset the depressing effects of technology and globalisat ion on labour's share, mainly by shaving the tax wedge between what workers take home and what they cost to employ. In large European countries, increases in the ratio of unemployment benefits to wages have hurt labour's prospects, probably against policymakers' intentions. (New Economist). Different factors have caused the labor share to decline in the Anglo-Saxon and European countries. In Europe, the share of labor has mainly been influenced by the immigration and offshoring whereas offshoring was not