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6.2.3 - Globalisation and Labour

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International Division of Labour

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Teacher
Teacher

Today, we will explore how globalisation has shifted manufacturing jobs across the globe, creating a new international division of labour. Can anyone explain what this means?

Student 1
Student 1

Does it mean that jobs that used to be in one country are now moved to others?

Teacher
Teacher

Exactly! For instance, Nike started making shoes in various countries to minimize costs. This flexibility often benefits companies but can leave workers vulnerable to job losses.

Student 2
Student 2

So, if a factory can move to another country where labour is cheaper, doesn't it put workers at the original location at risk?

Teacher
Teacher

Yes, that’s correct. The system of flexible production means that workers become more insecure as jobs shift across borders. Remember this: *Flexibility can lead to insecurity.*

Student 3
Student 3

What does this mean for those workers who lose their jobs? How do they cope?

Teacher
Teacher

Great question! It varies; some might find new opportunities, especially in tech jobs, but many are left vulnerable. Let's remember the acronym VUCA - *Volatility, Uncertainty, Complexity, and Ambiguity*. These are key elements faced by workers in this global landscape.

Student 4
Student 4

So, keeping in mind VUCA, this tells us that economic changes can really affect people's lives, right?

Teacher
Teacher

Exactly! Economic fluctuations due to globalisation can deeply impact the livelihoods of workers. Today we’ve learned about how labour movements shape the structure of economies and the lives of people.

Impact on Employment

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Teacher
Teacher

Let’s discuss the impact on employment. How has globalisation changed job prospects for young people today?

Student 1
Student 1

I think there are more IT jobs now, right? Like working in call centers?

Teacher
Teacher

Yes! Urban youth have exciting new career paths in IT and BPO sectors due to globalisation. But, what are some of the downsides?

Student 2
Student 2

It seems like there's still a lot of competition, and sometimes those jobs don’t pay very well.

Teacher
Teacher

Correct! While there are more opportunities, the creation of jobs hasn't kept pace with economic growth. Remember the term 'employment gap’ for this concept.

Student 3
Student 3

And what about those who don’t get these jobs? How do they manage?

Teacher
Teacher

Another significant point! Many face unemployment or low-wage jobs. Let’s summarize by saying: *While globalisation opens new doors, it can leave others locked out.*

Vulnerable Populations

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Teacher
Teacher

Now, let's dive into the vulnerabilities created by globalisation. Who do you think is most affected?

Student 1
Student 1

Probably the workers in factories that moved to lower-cost countries?

Teacher
Teacher

Right! Workers in manufacturing often lose their jobs due to these shifts. What about other groups?

Student 2
Student 2

Um, what about people in agriculture who face competition from imports?

Teacher
Teacher

Exactly! Farmers could be impacted as global imports make it hard for them to compete. Use the term 'displacement' to remember who gets pushed out.

Student 3
Student 3

What are the long-term effects of this displacement?

Teacher
Teacher

Displacement leads to social issues such as poverty and migration. Always remember: *Displacement equals vulnerability.*

Political and Economic Context

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Teacher
Teacher

Lastly, let’s connect political changes to globalisation. How do you think politics influences these trends?

Student 1
Student 1

Maybe through policies that promote free markets?

Teacher
Teacher

Excellent observation! Neo-liberal policies encourage global trade but can also create inequality. What does that mean for poorer communities?

Student 2
Student 2

They might not benefit as much as the wealthier classes.

Teacher
Teacher

Precisely! And let’s remember the concept of 'inclusive globalisation'—it advocates for benefits that reach all societal levels. Can you summarize the relationship between politics and globalisation?

Student 3
Student 3

Politics drives the economy while also determining how equitable the benefits are shared.

Teacher
Teacher

Well put! Today’s discussions highlight how intertwined our political and economic landscapes are, especially under globalisation.

Introduction & Overview

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Quick Overview

This section explores the impact of globalisation on labour and employment, highlighting the changes in the international division of labour and its implications for workers, particularly in developing countries.

Standard

Globalisation has triggered a new international division of labour, leading to routine manufacturing and employment shifting to developing countries. This shift creates both opportunities and challenges, particularly for urban middle-class youths while leaving many workers vulnerable. The section elaborates on the consequences of such changes, the uneven results of globalisation, and the socio-economic dynamics that arise from this transformation.

Detailed

Detailed Summary

This section delves into the significant changes in labour dynamics due to globalisation, emphasizing the new international division of labour, which has shifted routine manufacturing to Third World countries.

Key Points:

  1. International Division of Labour: The section begins with the concept of the international division of labour, illustrated by the example of Nike, where production locations have shifted in response to cost, leading to vulnerability among workers.
  2. Impact on Employment: It discusses the different ways globalisation affects employment opportunities, especially noting how urban middle-class youths have found new career paths in IT and BPO jobs. However, this has also led to disappointing job growth rates relative to economic growth.
  3. Vulnerability of Workers: As companies optimize for profits globally, many workers face job insecurity. The text highlights that while some benefits exist for a portion of society, vast disparities persist, leading to significant challenges for those at the bottom of the economic pyramid.
  4. Socio-Economic Dynamics: The section notes how these labour shifts are paired with broader socio-economic changes, how they affect the inequality of opportunity, and how these trends have been exacerbated by global economic policies.
  5. Political Context: Additionally, the text touches on the political implications of globalisation, suggesting that while the trend leans toward free-market policies, there is a need for inclusive globalisation that considers the welfare of all societal sections.

This overview sets the stage for deeper exploration into the multifaceted relationship between globalisation and labour, as well as the socio-political dynamics that accompany these transformations.

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Audio Book

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New International Division of Labour

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A new international division of labour has emerged in which more and more routine manufacturing production and employment is done in the Third World cities. You have already dealt with outsourcing in Chapter 4 and contract farming in Chapter 5. Here we simply draw upon the example of Nike company to illustrate how this works. Nike grew enormously from its inception in the 1960s. Nike grew as an importer of shoes. The founder Phil Knight imported shoes from Japan and sold them at athletics meetings. The company grew to a multinational enterprise, a transnational corporation. Its headquarters are in Beverton, just outside Portland, Oregon. Only two US factories ever made shoes for Nike. In the 1960s they were made in Japan. As costs increased production shifted to South Korea in mid-1970s. Labour costs grew in South Korea, so in the 1980s production widened to Thailand and Indonesia. Since the 1990s we in India produce Nike. However, if labour is cheaper elsewhere production centres will move somewhere else. This entire process makes the labouring population very vulnerable and insecure. This flexibility of labour often works in favour of the producers. Instead of mass production of goods at a centralised location (Fordism), we have moved to a system of flexible production at dispersed locations (post-Fordism).

Detailed Explanation

The globalisation of production has led to a new international division of labour, meaning that jobs in manufacturing are increasingly being done in countries like India, Bangladesh, and Vietnam, where labor is cheaper. Companies like Nike have set up production in countries like these to cut costs, showing a trend of outsourcing production. As wages rise in one country, production shifts to another where it’s cheaper. This model creates job insecurity as workers in these countries may lose their jobs if companies find cheaper labor elsewhere. This represents a broader change from traditional centralized manufacturing strategies (Fordism) to decentralized and flexible production (post-Fordism).

Examples & Analogies

Think of Nike like a chef who switches kitchens based on where he can find the cheapest, most talented cooks. This chef started in one kitchen, then moved to another as costs rose, eventually establishing kitchens all over the world. Each time he finds a new kitchen that offers better prices, he moves his operation there. The cooks in the original kitchens might lose their jobs, illustrating how globalization can create job insecurity for workers.

Impact of Globalisation on Employment

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Another key issue regarding globalisation and labour is the relationship between employment and globalisation. Here too we see the uneven impact of globalisation. For the middle-class youth from urban centres, globalisation and the IT revolution have opened up new career opportunities. Instead of routinely picking up B.Sc./B.A./B.Com. degree from colleges, many young persons are learning computer languages at computer institutes, taking up jobs at call centers or Business Process Outsourcing (BPO) companies, working as sales persons in shopping malls or picking up jobs at the various restaurants that have opened up. Yet, as Box 6.5 shows, broader trends of employment are disappointing.

Detailed Explanation

Globalisation impacts jobs in different ways across social classes. Urban, middle-class youth often benefit from this change, finding new jobs in technology sectors such as IT, call centers, and retail. However, the overall employment landscape is troubling as the creation of new jobs does not keep up with economic growth in areas like Asia. Many young people are changing career trajectories to learn skills that attract global job opportunities, but these trends are not positive for everyone. Job growth in some regions remains unsatisfactory despite economic advancements.

Examples & Analogies

Imagine a huge tree in a park where people sit beneath it. For some, like the urban youth, there’s plenty of fruit (job opportunities) falling from the branches. They grab jobs in IT, services, and retail. Yet, for many others out of the shade of the tree, the ground is barren, with not enough jobs to match the increasing number of job seekers. This symbolizes how globalization can nourish some while leaving others without the resources they need.

Political Changes Related to Globalisation

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In many ways it was a major political change, namely, the collapse of the erstwhile socialist world that hastened globalisation. And also gave a specific economic and political approach to the economic policies that underpin globalisation. These changes are often termed as neo-liberal economic measures. We have already seen what concrete steps the liberalisation policy took in India. Broadly these policies reflect a political vision of free enterprise which believes that a free reign to market forces will be both efficient and fair. It is, therefore, critical of both state regulation and state subsidies.

Detailed Explanation

The fall of socialist regimes in many parts of the world led to an increase in globalization, with countries moving towards more liberal economic policies. These policies are known as neo-liberal, emphasizing reduced government intervention in business and allowing market forces to drive economic growth. The idea is that these free market principles will promote fairness and efficiency in economies. However, this kind of approach can also mean that the needs of the less privileged are overlooked.

Examples & Analogies

Think of a playground where a new rule allows kids to play any game they like without adult supervision. Initially, it sounds exciting, as kids can make their own choices and form teams. However, not all kids can play the games effectively. Some might end up without any friends or teams, while others thrive, showing how free play (or a free market) can benefit some while leaving others behind.

Cultural Impact of Globalisation

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There are many ways that globalisation affects culture. We saw earlier that over the ages India has had an open approach to cultural influences and has been enriched because of this. The last decade has seen major cultural changes leading to fears that our local cultures would be overtaken. We saw earlier that our cultural tradition has been wary of the kupamanduka, the frog that lives its whole life within a well, knows nothing else, and is suspicious of everything outside it. It talks to no one, and argues with no one on anything. It merely harbours the deepest suspicion of the outside world. Fortunately for us we retain our ‘traditional’ open-ended attitude to this day.

Detailed Explanation

Globalisation introduces new cultural influences that can lead to significant changes in local cultures. In India, while there is a tradition of welcoming cultural diversity, globalization raises concerns over the potential dilution of those local traditions. The metaphor of the 'kupamanduka' (the frog in the well) illustrates the importance of openness to external influences to avoid cultural isolation. This reflects a broader societal view—while external cultural influences can enrich societies, they can also threaten local practices.

Examples & Analogies

Imagine a small town that always celebrates its unique festivals. Then, one year, a famous food truck from the city arrives and starts attracting everyone with its cuisine. While the town enjoys the new flavors, some worry that their traditional delicacies might soon be forgotten. This situation illustrates how globalization can bring in new and exciting elements but also raises concerns about preserving cherished local traditions.

Definitions & Key Concepts

Learn essential terms and foundational ideas that form the basis of the topic.

Key Concepts

  • Globalisation: The process by which businesses or other organizations develop international influence or start operating on an international scale.

  • Labour Mobility: The ability of workers to move from one place to another for work, influenced by global economic changes.

  • Capitalist Production: The process in which goods and services are produced under a capitalist economic system.

  • Transnational Corporations: Companies that operate in multiple countries, often influencing global economic patterns.

Examples & Real-Life Applications

See how the concepts apply in real-world scenarios to understand their practical implications.

Examples

  • Nike's production has moved from Japan to South Korea to Indonesia and now to India, demonstrating how globalisation shifts manufacturing jobs to lower-cost countries.

  • Many young individuals in urban areas now pursue careers in IT and BPO sectors as a result of globalisation, shifting from traditional occupations.

Memory Aids

Use mnemonics, acronyms, or visual cues to help remember key information more easily.

🎵 Rhymes Time

  • Globalisation's dance, jobs shift and prance, some find chance while others face a circumstance.

📖 Fascinating Stories

  • In a bustling city, a young man named Raj used to work in a local factory. One day, the factory shifted production to another country for cheaper labor. Raj decided to learn about computers and found a job in IT, illustrating how globalisation can sometimes lead to new opportunities while others lose their jobs.

🧠 Other Memory Gems

  • Remember VUCA for globalisation's effects: Volatility, Uncertainty, Complexity, Ambiguity – it encapsulates the challenges faced by workers.

🎯 Super Acronyms

Remember 'I.O.U.'

  • International division of labour
  • Outsourcing
  • Vulnerability.

Flash Cards

Review key concepts with flashcards.

Glossary of Terms

Review the Definitions for terms.

  • Term: International Division of Labour

    Definition:

    The global allocation of different stages of production to various countries or regions, each specializing in particular tasks based on comparative advantages.

  • Term: Outsourcing

    Definition:

    The practice of obtaining goods or services from an outside or foreign supplier to cut costs.

  • Term: Vulnerability

    Definition:

    The degree to which a population or individual is at risk of social, economic, or environmental harm due to external factors.

  • Term: Inclusive Globalisation

    Definition:

    A vision of globalisation where all members of society benefit from economic growth and opportunities.

  • Term: Displacement

    Definition:

    The forced removal of individuals or groups from their home or employment due to economic changes.