Labor Forces

McGraw-Hill/IrwinInternational Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

chapter twelve

12-3

Learning Objectives

Identify forces beyond management control that affect the

availability of labor

Explain the reasons that cause people to leave their home

countries

Discuss the reasons that some countries have guest

workers

Explain factors associated with employment policies,

including social roles, gender, race, and minorities.

12-4

Learning Objectives

Discuss differences in labor unions among

countries

12-5

Labor Quality and Quantity

Quality, quantity, and composition of labor force are of great importance to an employer Labor Quality

The skills, education, and attitudes of available employees

Labor Quantity

The number of available employees with the skills required to meet an employer’s business needs

12-6

Worldwide Labor Conditions and Trends

Overall Size and Sector of the Work Force

International Labor TrendsAging of Populations

Rural to Urban Shift

Unemployment

Immigrant Labor

Child Labor

Forced Labor

Brain Drain

Guest Workers

12-7

Primary Occupation of National Labor Force

Source: https://www.cia.gov/cia/publications/factbook/fields/2048.html (July 25, 2006).

12-8

Aging Of Population

Source: U.S. Census Bureau, International, “Midyear Population, by Age and Sex,” www.census.gov/cgi-bin/ipc/idbagg (July 27, 2006

12-9

Rural to urban Shift

Source: World Urbanization Prospects: The 2003 Revision (New York: United nations, 2003), pp. 3-4.

12-10

Unemployment

• 192 million overall unemployed– Middle East and North Africa (13.2%)– Sub-Saharan Africa (9.7%)– Central and Eastern Europe (9.7)– Latin America and Caribbean (7.7)– Developed economies (6.7%)– Southeast Asia and the Pacific (6.1%)– South Asia (4.7%)– East Asia (3.8%)

12-11

Labor Mobility

Labor Mobility The movement of people from country to country or

area to area to get jobs Immigration

Refers to the process of leaving one’s home country to reside in another country

Foreign-bornPopulation comprises those immigrants whose

move is permanent and may include taking citizenship

ForeignPopulation who are guest workers

12-12

Foreign and Foreign-Born Population in Selected OECD Countries

12-13

Labor

• Child Labor– The labor of children below 16 years of age

who are forced to work in production and usually receive little or no formal education• Primarily found in developing nations• Existent in developed countries• 70% is in agriculture

• Forced Labor– Most common in South and East Asia

12-14

Brain Drain

• Brain Drain– The loss by a country of its most intelligent and

best-educated people

– Record numbers of immigrants are moving to OECD countries in search of jobs

– When skilled workers migrate from developing countries they do so for professional opportunities and economic reasons

• Reverse Brain Drain– The growth of outsourcing and the movement of

highly educated, technologically skilled employees and research scientists to other countries

12-15

Brain Drain: Countries with the Highest Percentage of Their College-Educated Citizens

Living in Other Countries

12-16

Guest Workers

• People who go to a foreign country legally to perform certain types of jobs

• Guest workers provide the labor host countries need– Guest workers are desirable as long as the

economies are growing– When economies slow, fewer workers are needed

and problems appear

12-17

Considerations in Employment Policies

• Social Status– Important with respect to labor force, especially in some

cultures– Caste: the group to which people belong in a system under

which people’s place or level in a multilevel society is established at birth as being the same level as that of their parents

• Sexism – Acceptability of women as full and equal participants in the

work force ranges widely

12-18

Women’s Education

• Studies show a direct correlation between women’s education and– Birthrates

– Child survival rates

– Family health

– A nation’s overall prosperity

12-19

Female Illiteracy

12-20

Ratio of Wages, Woman versus Men, Selected OECD Countries

12-21

Racism

• Black and White conflict– U.S., South Africa, Great Britain and

elsewhere

• Arab-, Indian-, or Pakistani and Black conflict– Africa

• Tamils and Sinhalese Conflict– Sri Lanka

12-22

Minorities

Traditional Societies Tribal peoples before they turn to organized

agriculture or industry; traditional customs may linger after the economy changes

Minorities A relatively smaller number of people

identified by race, religion, or national origin who live among a larger majority

12-23

Employer-Employee Relationships

Labor Market The pool of available potential employees with

the necessary skills within commuting distance from an employer

A company must study the labor market when considering whether to invest in a country

Sources includeForeign Labor Trends

Handbook of Labor Statistics

Yearbook of Labor Statistics

12-24

Country Strike Rates, Selected OECD Nations

Source:  Rachel Beardsmore, "International Comparisons of Labour Disputes in 2004," in Office for National Statistics (U.K.), Labor Market Trends, April 2006, p. 119, http://www.statistics.gov.uk. c Crown Copyright.  Reproduced under the terms of the Click-Use License.

12-25

Labor Unions

• Organizations of workers• European labor

– Identified with political parties and socialist ideology• United States labor

– Laborers already have many civil rights– Collective bargaining

• The process in which a union represents the interests of a bargaining unit (which sometimes includes both union members and nonmembers) in negotiations with management

12-26

Labor Unions

• Japanese unions are enterprise-based rather than industry wide– As a result, unions tend to identify strongly

with company interests– However, Japanese workers are reported

least satisfied with jobs in developed world

12-27

Labor Union Membership Trends

• Employers have made efforts to keep their businesses union-free

• More woman and teenagers have joined the work force, low loyalty to unions

• The unions have been successful in raising wages, which leads to offshoring

• In the knowledge economy, industrial jobs that have formed the core of union membership are declining

12-28

Multinational Labor Activities

• Internationalization of companies creates opportunities for them to escape the reach of unions

• In response, unions have begun to– Collect and disseminate information about

companies– Consult with unions in other countries– Coordinate with those unions’ policies and tactics– Encourage international companies’ codes of

conduct• Multinational unionism is developing

12-29

Multinational Labor Activities

International Labor Organization (ILO) Purpose is to promote social justice and

internationally recognize human and labor rights worldwide

Trade Union Advisory Committee to the OECD Consults on trade union issues in global markets