Lecture International business (11/e) - Chapter 12: Labor forces

After completing this chapter, students will be able to: 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.

Labor Forces

chapter twelve

 Explain factors associated with employment policies,

including social roles, gender, race, and minorities.

Learning Objectives

 Discuss differences in labor unions among countries

Labor Quality and Quantity

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

Worldwide Labor Conditions and

Aging Of Population

Source: U.S Census Bureau, International,

“Midyear Population, by Age and Sex,”

www.census.gov/cgi-bin/ipc/idbagg (July 27,

Rural to urban Shift

Source: World Urbanization Prospects: The 2003

Revision (New York: United nations, 2003), pp 3-4.

• 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%)

Labor Mobility

 Labor Mobility

 The movement of people from country to country or

area to area to get jobs

Foreign and Foreign-Born Population

in Selected OECD Countries

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

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

Brain Drain: Countries with the Highest

Percentage of Their College-Educated Citizens

Living in Other Countries

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

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

Women’s Education

• Studies show a direct correlation between

women’s education and

Female Illiteracy

Ratio of Wages, Woman versus Men,

Selected OECD Countries

Racism

• Black and White conflict

– U.S., South Africa, Great Britain and

 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

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 include

Foreign Labor Trends

Handbook of Labor Statistics

Yearbook of Labor Statistics

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

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

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

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

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

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