chapter twelve

Labor Forces

McGraw-Hill/Irwin
International Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserv
 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.

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 Learning Objectives

 Discuss differences in labor unions among

countries

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 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

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Worldwide Labor Conditions and
Trends
Overall Size and Sector of the Work
Force
International Labor Trends
Aging of Populations
Rural to Urban Shift
Unemployment
Immigrant Labor
Child Labor
Forced Labor
Brain Drain
Guest Workers 12-6
Primary Occupation of National Labor
Force

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

12-7
 Aging Of Population

Source: U.S. Census Bureau, International,

“Midyear Population, by Age and Sex,”
http://www.census.gov/ (July 27, 2006).
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 Rural to urban Shift

Source: World Urbanization Prospects: The 2003

Revision (New York: United nations, 2003), pp. 3-4. 12-9
 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%)

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 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-born
 Population comprises those immigrants whose
move is permanent and may include taking
citizenship
 Foreign
 Population who are guest workers
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Foreign and Foreign-Born Population
in Selected OECD Countries

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 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

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 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

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

12-15
 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

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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

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 Women’s Education

• Studies show a direct correlation between

women’s education and
– Birthrates

– Child survival rates

– Family health

– A nation’s overall prosperity

12-18
Female Illiteracy

12-19
Ratio of Wages, Woman versus Men,
Selected OECD Countries

12-20
 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

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 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

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 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
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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.
12-24
 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

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 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

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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
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 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

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 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

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