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The global economy has had various effects on the lives of the people across the world. One of the elements that are highly debated is the issue of employment and wage rate. The problem has resulted in diverse views, some championing it as positive while others give its negatives. There have been some instances where globalization or global economy has led to increased employment; however, the most significant concern is the issue of the wage rate and employee treatment in some countries. Therefore, the question needs to be addressed because it affects the society and the parties that are involved and these are mainly the employees since it changes the living standards.
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The faster-growing integration of larger, low-wage nations such as China, Brazil, Russia as well as India in the global economy may have aggravated worries that the Organization for Economic Co-operation and Development (OECD) employees are becoming less competitive worldwide. For example, the four countries or the “BRICs” mentioned, represent about 45% of the global labor supply in comparison to the less than 20% for all the OECD nations. The four countries are progressively open to investment and trade and over the past, more than fifteen years, total business as the proportion of GDP grew beyond 50% in Russia, approximately double regarding China and above the double in India as well as Brazil (Mander, 2014). The standard trade theory shows that such a development could be a basis of job insecurity as well as the downward pressure regarding the wages for the low-skilled employees in the OECD nations. However, it offers a benefit for the clients in the form of the lower prices of the products. It is given that the production cost is minimized in the process where the countries come together and share a common ground regarding the interactions of the employees from one nation to another (Mander, 2014). Moreover, this offers the benefit of the consumers concerning the lower prices. However, the employees’ activities and their compensation are always controversial.
Another unique feature of the wave that is still increasing regarding the global economy is that it hand-in-hand with the quick adoption of ITC, which is the Information data as well as communication technologies utilized because of the globalization issues. The techniques ensure it is easier for production of the services and commodities as well as the process of outsourcing of particular tasks to other nations. It is viewed as a tremendous unbundling that extends the reach of the global economy to the local or domestic economic activities where the employees were previously limited from the direct global competition (Sassen, 2014). Although the offshoring of the services regarding the customer data call centers has increased in the modern time; for instance, its importance in the local production remains to be smaller than that of goods offshoring.
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It is ascertained that foreign competitions are there regarding the employment opportunities in various companies or organization (Varoufakis, 2015). Primarily, this is from China, and other countries that are rich regarding labour because of their population and the emerging economies drive high-wage nations out of the tradable and the non-tradable sector. The move out of the manufacturing into the services is mostly seen as a sign that the process is already ongoing (Stiglitz, 2013). Nonetheless, the process could be maintained, and it is probable that trade will lead to the reduction in employment in the long run.
The nations that imports and do not export as much would soon be kicked out of the international markets and the foreign exchange needed to fund their imports, through the requirement either to end importation or to recommence the exportation of their products. Neither the extending of the emerging economies nor the rising distinction of offshoring alters the sense of “mutually advantageous trade” as provided in the principle of comparative advantage (Varoufakis, 2015). Therefore, the employees in the disadvantaged countries will continue to low wage rates as well as low standards of living because of the global economy.
Because of the global economy, there have been various mistreatments concerning the employee from developing countries working in other regions because of the worldwide economy. For example, the 7-Eleven company in Australia has been mistreating the workers who are the international students from the developing nations. They have suffered from underpaying for their services as well as their complaints in the workplace being ignored by the management leading to the suffering because they are foreigners (Terry-Armstrong, 2016). Therefore, this has been one of the cases that illustrated the negatives of global economy or globalization that makes many people have the negative view of same. These workers are not even given a chance to explain their views and are also not given the opportunity to participate in the decision-making process even though they work in such organizations (Briton, 2015). Moreover, it shows that global economy has led to low wage rate regarding the foreign workers in that they are paid lowly, and this is a mistreatment concerning their hard work in the companies in the developed countries.
- The countries involved as well as the mother countries of the employees should come up with a strategy where the employees are treated equally regardless of where they come from given the performance is the same with that of the locals.
- Before making any contracts, the countries entering in any agreement regarding the exports and the imports must consider a ground that no other partners surfer from the understanding, or the relationship to ensure that the employment rate, as well as the living standards of the people, is not affected in the process.
- The workers should be employed on their merits, and their say regarding the operations in the foreign countries should be treated equally with the locals or the citizens instead of discrimination concerning the place of origin.
- There should be some international law controlling the terms of engagements in the various countries that have integrated their association since it is essential for an individual from another country working or investing to get the precise picture and have an environment that is conducive in dealing with any activity regarding the global economy.
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- Briton, B., 2015. 7-Eleven scandal: The tip of a low-wage iceberg. Guardian (Sydney), (1705), p.1.
- Mander, J., 2014. The case against the global economy: and for a turn towards localization. Abingdon, United Kingdom: Routledge.
- Sassen, S. (2014). Expulsions: Brutality and complexity in the global economy. Harvard: Harvard University Press.
- Stiglitz, J., 2013. The global crisis, social protection and jobs. International Labour Review, 152(s1), pp.93-106.
- Terry-Armstrong, N., 2016. 7-Eleven: A case study of a flawed franchise model. Busidate, 24(2), p.8.
- Varoufakis, Y., 2015. The global minotaur: America, Europe and the future of the global economy. London: Zed Books Ltd.