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Tuesday, April 17, 2007
An Advanced Country Perspective:
Does Globalization Harm Workers’ Interests?
Anxiety about globalization also exists in advanced economies. How real is the perceived threat that competition from "low-wage economies" displaces workers from high-wage jobs and decreases the demand for less skilled workers? Are the changes taking place in these economies and societies a direct result of globalization?
Economies are continually evolving and globalization is one among several other continuing trends. One such trend is that as industrial economies mature, they are becoming more service-oriented to meet the changing demands of their population. Another trend is the shift toward more highly skilled jobs. But all the evidence is that these changes would be taking place—not necessarily at the same pace—with or without globalization. In fact, globalization is actually making this process easier and less costly to the economy as a whole by bringing the benefits of capital flows, technological innovations, and lower import prices. Economic growth, employment and living standards are all higher than they would be in a closed economy.
But the gains are typically distributed unevenly among groups within countries, and some groups may lose out. For instance, workers in declining older industries may not be able to make an easy transition to new industries.
What is the appropriate policy response? Should governments try to protect particular groups, like low-paid workers or old industries, by restricting trade or capital flows? Such an approach might help some in the short-term, but ultimately it is at the expense of the living standards of the population at large. Rather, governments should pursue policies that encourage integration into the global economy while putting in place measures to help those adversely affected by the changes. The economy as a whole will prosper more from policies that embrace globalization by promoting an open economy, and, at the same time, squarely address the need to ensure the benefits are widely shared.
Government policy should focus on two important areas:
- education and vocational training, to make sure that workers have the opportunity to acquire the right skills in dynamic changing economies; and
- Well-targeted social safety nets to assist people who are displaced.
This article is a segment from:
http://www.imf.org/external/np/exr/ib/2000/041200.htm#VI
REFLECTIONS
The above article states cons of globalization, which takes the opposite stand as what we view globalization as-a provider of luxuries and many benefits to come! It basically outlines the fact that workers, especially blue-collared workers, are losing their benefits and place in society, many thanks to globalization. The article also questions the fact that globalization is the direct cause for these workers to lose their jobs and in turn “decreases the demand for less skilled workers”, as quoted from the article. The article raises a truckload of questions which are indirectly concerned with us, our present and future. Is rapid economic growth of each country a product of globalization? Are we really neglecting the needs of less skilled workers in our endless pursue for an upscale economy, and with it high-skilled jobs? Should the government put forward plans to help ingratiate these less skilled workers into the rapidly growing global economy, or leave them in degradation? And the most important of all, is everyone benefiting from globalization economically or is this just the case for those dominating the economic scene?
In actual fact, these less skilled workers are being major hindrances in achieving rapid globalization and economic growth as they lack the skill of adaptability and also the ability to catch up with the more highly-skilled. They eventually lose out to the more capable, intelligent lot in this endless rat race towards globalization. Currently, which country does not welcome globalization with open arms, with its benefits: “capital flows, technological innovations, and lower import prices” as quoted from the article. With globalization come wealthier economies and higher employment levels coupled with higher living standards. This spells better lives for many who are benefiting from this rapid economic growth, and also better opportunities for the better-skilled, better-learned. You reap what you sow, and in our current society, the more you contribute to globalization and economic growth, the more you benefit from globalization. This is not the case for less skilled workers.
Those who are outcast from these benefits are actually the less skilled workers and those in declining in older factories, as stated from the article. What globalization has brought upon the two differing groups of workers is so ironic: while these less skilled workers are struggling to accept change and adapt to the rapid pace of life, everything falls into place for the highly skilled as they busily upgrade themselves and prepare to benefit more from globalization. From my viewpoint, the less skilled are forever doomed in the deep murky waters of globalization, struggling blindly to stay afloat but failing miserably. The benefits from globalization exclude them, and there is nothing they can do besides remaining in the lower economic classes of these countries which are pursuing even greater technological and industrial growth. The unequal sharing of benefits may even deem globalization as an unfair motion. Shouldn’t all workers, regardless of their skill, have equal access to the benefits of the flourishing economy?
What has the government actually done to help these less skilled workers? Unfortunately, to include them once again in the flourishing economy is akin to retarding economic growth and the rate of globalization. What the article actually suggests is to encourage the less skilled to pursue education once again, acquiring new skills to help themselves ingratiate into the prospering economy. Another option is to have “Well-targeted social safety nets to assist people who are displaced”. Will these options work? Will the less skilled workers finally become a part of the globalised economy? Maybe the day will come when there will finally be equal sharing of globalization benefits and less-skilled workers will no longer be existent.
Economic expert,
Vanessa.
Globalised @ 7:00 AM
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