Globalization Has Affected Collective Bargaining Around The World

The State University of New York (2014) provides and clear and accurate description of globalization:

Technology has made the world a smaller place. Recent innovations in jets, satellites, and computers have made communication across the globe faster. People are now able to travel to any destination they want in less than a day, so why can’t businesses travel as well? Globalization intends to answer that question. New technology has increased worldwide trade and investment by allowing more companies to trade at a faster rate. Thomas Friedman considers globalization to be “farther, faster, cheaper, and deeper than ever before” (9). Multinational corporations that have entered globalization can now trade their business wherever labor is the cheapest.

Globalisation is the internationalization of trade and often forces businesses to adopt new strategies for operations to suit different cultures and economies. The often easily saturated domestic market has triggered many large

Globalization is taking its toll on the American work force. “In the 1980’s, globalization hurt blue-collar America,” (Steven Greenhouse, 2008) this was due to the vast amount of imported steel, autos, machinery, and electronics. It is now the twenty-first century. Globalization is not only affecting blue-collar workers, but has extended its reach to white-collar workers. Jobs are being lost in America as corporations move production, and/or outsource jobs to low-wage producing countries. It is estimated over 7.9 million jobs have been lost this year, and some of these jobs will never return. This is corporation’s philosophy on how to cut cost, which in-turn translates into a larger profit margin. Because of these extensive job losses, the

Generally, globalism has been attributed to better worldwide communication, advanced technological development, and a higher international standard of living, and rightfully so. However, with all these new worldwide advantages comes a new type of human exploitation. Many companies, specifically American ones, have been quick to take advantage of the cheap and dangerous labor available in most of the undeveloped world. Countries who are working through their period of Industrialization are being siphoned off and used to maintain America’s economy, while their developing country reaps no reward from the low paying, dehumanizing jobs that American companies offer their low class workers. This type of inhumane job outsourcing can only be compared

"Labor market" can be defined as the mechanism in which workers compete for jobs and employers compete for workers. In a labor market, wages, benefits and responsibilities of workers are bought and sold. Unlike traditional markets however, labor is not a good that can be differentiated by conventional rules of supply and demand. While workers are the suppliers and employers are the buyers, overall supply cannot be manufactured as people only have a limited amount of time in a day. Additionally, companies are strong and can often directly manipulate the market by setting strict labor rules, triggering potential reductions in any supply side

The relationship between economic globalization and labor market power provides empirical trends in world average and the world equality through structural bargaining power and associated power, thereby allowing workers to achieve convergence across nations (Mahutga). What labor market power does for economic globalization is that it increases the probability of labor internationalism through two models, namely, the structural model and the institutional model. Beverly Sliver, Tamara Kay, Nita Rudra, and Matthew Mahutga provide different theories and data, breaking down the trends of labor power and labor movement on a global scale.

If we want to fully understand the importance of globalization and its effects on the world’s economy and society now and its potential for the future, it is vital that we study its past and how it has originated. The history of Globalization is broad and diverse therefore it is only possible to outline some of the main areas. Globalization isn’t just a modern day phenomenon. Trading activities date from the very earliest of civilizations, but it was the Middle Ages in Europe that initiated systematic cross-border trading operations carried out by institutions of a private corporate nature. By the end of the 14th century it is estimated that there were as many as 150 Italian banking companies already operating multinationally. (Dunning, 1993) This is not exactly globalization, it is however international trade. International trade is one of the main concepts behind globalization.

During the past decades, the labor market consequences of international integration have been at the center debate. Anti-globalization protest the World Trade Organization-WTO, the International Monetary Fund - IMF and the World Bank meetings reveal that many people fear that they may lose their job or may be confronted with lower wages because of the threat of fiercer international competition. However, based on a 2007 WTO report globalization efforts have only increased as innovations in transportation and communications lower cost and allows new markets to be economically viable. Therefore, multinational organizations can expect additional culture friction in the future.

The rapid pace of Globalization has led to a change in the global economy during the past several decades; it is believe that factors such as trade liberalisation, access to cheaper labour and resources, similarity of consumer demand around the world, and advances in technology and communication has widened the market of consumption, investment as well as production on a global scale. These globalization driven factors created new challenges and global competition for businesses around the world thus as a response many companies decided to expand their operation across national borders in order to be competitive. A company that operates their business in at least one country other than its country is called Multinational

The following pages focus on analyzing the effects of globalization on labor markets, which is an important international business topic. The Introduction presents the points of view used in addressing this issue. The Labor Markets section presents some of the most important characteristics of labor markets that must be presented in order to understand how they are affected by globalization. The Key Priorities of Labor Markets section presents some of the most important priorities of governments determined by globalization. The Globalization of Labor Markets and The Effects of Globalization of Labor Markets section provides an analysis of this issue, its effects and its importance. The Conclusions section provides some of the most important issues addressed by this paper.

Globalization can be seen as a major threat for manufacturing jobs in the developed world, however, can also be a benefit for developing world citizens who receive thousands of jobs a year although they don’t receive a high salary. Maurice Allais, a French economist states that this unemployment, of course, has only been able to develop because of the existence of low salaries and insufficient flexibility in the labor market (April 10th, 1999). This indicates that globalization has jeopardized Western countries jobs because companies are moving their establishments to developing countries where they don’t need to pay employees as much and where land is cheaper so overall businesses benefit from this. Also, employees in the developed world are at risk of becoming redundant as they are susceptible to face pay cuts in jobs. Employees are less skilled in the developing world as they don’t receive the benefit of an education like developed countries do. So a company may want to build factories in these countries because environmental laws aren’t as strict. Establishments in these areas provides promising jobs for the local people and allows them to learn new skills, however they are set on minimum wage which in developed world countries, this would not be enough to live on, wherein third world countries this is still a low amount so this is not enough to bring them out of poverty meaning that the only one who benefits from this is the company. Although there have been several arguments against exploitation and oppression, the majority of developing countries do not have existing laws which take minimum wage

With the increase in globalization, there is more communication occurring between people not only of the same culture but of different cultures, making clear communication more difficult with regards to the syntax of different languages. These different cultures all have varied ways of teaching their people with regards to education, societal norms, and their culture as a whole. Cultures may be similar in one value while at the same time, they can be complete opposites in another. It is because of these differences, misunderstandings can occur and can lead to high tension within the workplace. Whether in written or verbal form, this is why you cannot just divulge your thoughts and expect the intent to be understood by the recipient.

Up to now the literature review has given an insight into the concept of globalization, and the understanding of several academics in the light of how this phenomenon developed over the years. It is then essential to cover what the economic benefits of globalization are, and how these may impact a sector or company. Most of the literature study’s that have been written on the economic benefits of globalization have been after 2006. The reason is because the studies used the globalization index which was created by Dreher (2006) then further developed by Dreher (2008) again. Many of the empirical studies used this index as indicator as a base to form their findings.

The concept of globalization has become a prevalent phenomenon in the past two decades because of the changes it has brought and the adoption of its strategies by multinational corporations or companies. The economic changes of globalization include the strengthening of economic inter-dependence, internationalization of production, and enhanced mobility of transnational corporations. On the other hand, trade liberalization, privatization, and deregulation are the ideological changes emanating from this concept.