12 Labor Forces International Business by Ball, McCulloch, Frantz, This chapter covers: Forces that affect availability of labor Reasons people leave their home countries Guest workers The U.S. immigration system Labor productivity Women’s labor Labor unions Labor’s voice in management Labor Forces International Business by Ball, McCulloch, Frantz, Geringer, and Minor McGraw-Hill/Irwin Copyright © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Chapter Objectives Recognize forces beyond management control that affect the availability of labor Understand the reasons that cause people to leave their home countries Discuss guest workers Understand the basics of the immigration system in the U.S. Discuss labor productivity Understand women’s labor, employment and social roles Discuss differences in labor unions among countries Understand how labor is getting a voice in management 12-2

Introduction Quality, quantity, and composition of labor force of great importance to an employer Labor Quality Refers to the attitudes, education, and skills of available employees Labor Quantity Refers to the number of available employees with the skills required to meet an employer’s business needs 12-3

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 For people who are not citizens of the U.S., the U.S. can be a difficult country to enter 12-4 The Immigration and Naturalization Service (INS) in 2003 became The Bureau of U.S. Citizenship & Immigration Services (USCIS) as part of the Department of Homeland Security (DHS) USCIS has two conflicting missions Allow legal immigrants in Keep illegal immigrants out

Immigration The U.S. is a nation of immigrants Immigration is a federal matter in the U.S. The first law limiting immigration passed in 1921 Congress amended the immigration laws many times through the years In 1965 Congress adopted a system based on family reunification and employment skills In 1986 Congress passed the Immigration Reform and Control Act making it a crime to hire unauthorized immigrants Employment eligibility is verified by completion of an I-9 form 12-5

Nonimmigrant Visas Nonimmigrant Visas Major visa categories Issued to those coming to the U.S. for temporary visit Usually no more than six years Most (96 percent visitors to the U.S.) come for temporary visits Major visa categories The B visa is issued for short-term stay 12-6 The E visa is for noncitizens coming to the U.S. to carrying on trade between the U.S. and a noncitizen’s home country The F visa is for students The H visa is for workers The I visa is for members of the media The J visa is for exchange scholars The L visa is for intracompany transferees

Immigrant Visas For individuals who want to remain permanently in the U.S. Individuals receiving immigrant visas are classified as permanent residents Often called a “green card” Two main categories for the issuance of immigrant visas Family reunification Employment-based immigration 12-7

Refugees/Asylum Seekers People fleeing persecution may request asylum The reasons people move include Economic globalization Population growth in developing countries New technology that allows immigrants to maintain contact with family Technological improvements in transportation For political reasons To escape adverse situations 12-8

Standard for Admission For asylum, must establish a well-founded fear of persecution based on Race Religion Nationality Membership in a particular group United Nationals High Commission for Refugees (UNHCR) created by UN Assists refugees 12-9 Refugees are not welcome in many countries Poor Uneducated Hard to find work Refugees, however, supported U.S. economic growth Many U.S. business rely on non-U.S. citizen workers Many high-tech workers come under H-1B visa

Brain Drain 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 This “brain drain” has become a serious problem for developing countries Reverse “brain drain” The growth of outsourcing and the movement of highly educated, technologically skilled employees and research scientiests to other countries 12-10

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 However, when economies slow, fewer workers are needed and problems appear 12-11

Labor Force Productivity Measures how many acceptable units are produced by a worker during a given time and the cost per unit U.S. led other industrialized countries in rise in labor productivity Up to a quarter of income growth per worker in the U.S. can be attributed to better education Greater productivity results in greater investment in Research & Development (R&D) 12-12

Considerations in Employment Policies Social Status Culture important with respect to labor force India operates rigid caste system Level established at birth Cannot change during lifetime Impacts employment Japan still maintains caste system Great Britain classifies based on accents 12-13 Sexism Acceptability of women as full participants in the work force ranges from Relatively advanced in the U.S. and Western Europe to virtually nonexistent in many countries In Japan and the Middle East women are encountering major problems in making or retaining progress

Women’s Education Studies show a direct correlation between women’s education and Birthrates Child survival Family health A nation’s overall prosperity Low levels of education are present where girls are forced into prostitution or brutalized 12-14

Minorities Traditional Societies Minorities Tribal, nomadic states of people before they turn to organized agriculture or industry Minorities Usually a relatively smaller number of people Identified by race, religion, or national origin who live among a larger number of different people Such minorities may be immediately available, bringing financial and managerial skills to the employer However, minorities are often unpopular with the majority and discrimination is common 12-15

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 12-16

Labor Strikes Questions to ask Was the period of the strike abnormal? Were the strikes peaceful? Were the strikes industry wide? Were the strikes wildcat? Do the unions and workers abide by the labor agreements? 12-17

Labor Unions European Labor Unions Identified with political parties and socialist ideology U.S. Labor Unions Unionism in the U.S. has been more pragmatic than political Also more concerned with the immediate needs of workers 12-18 Japanese unions are enterprise-based rather than industry wide As a result, unions tend to identify strongly with the interests of the company However, Japanese workers are reported to be the least satisfied with their jobs in the developed world

Labor Legislation Collective Bargaining in the U.S. The process in which a union represents the interests of everyone in a bargaining unit in negotiations with management Labor Legislation in Europe Government’s role is more active Wages and working conditions are frequently legislated 12-19

Labor Legislation Labor Legislation in Latin America Governments are very active in employer-employee relationships Frequently because the unions are weak and the union leaders are inexperienced or uneducated Labor Legislation in Germany and France Labor negotiations are conducted on national or at least regional levels 12-20

Labor Trends Strikes or labor disputes have fallen dramatically in the last 10 years Union membership has been in steady decline Employers have made efforts to keep union-free More women and teenagers in workforce Unions have been successful Industrial jobs are declining 12-21

Multinational Labor Activities Internationalization of companies creates opportunities for them to escape the reach of unions To combat this danger 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’ code of conduct Multinational unionism is developing 12-22

Multinational Labor Activities The U.S. union federation, the AFL-CIO Cooperates with labor organizations worldwide International Labor Organization (ILO) Purpose is to promote social justice and internationally recognized human and labor rights worldwide Trade Union Advisory Committee to the OECD An international trade union organization with consultative status with the OECD and its various committees 12-23

Worker Participation in Management Codetermination Participation by workers in a company’s management Began in Germany Has spread to other European countries and Japan Referred to as worker participation in the U.S. European Union requires Works Councils 12-24

Female labor force participation rates by age group, selected economies 12-25

Annual hours worked per person, selected developed (industrialized) economies 12-26

Percentage change in real wages, selected economies

Labor productivity, total economy, selected developed (industrialized) economies 12-28

Top 10 States With Most Union Members in 2000 (in thousands) California 2,295 New York 1,958 Illinois 1,046 Michigan 938 Ohio 879 Source: U.S. Bureau of Labor Statistics Pennsylvania 870 New Jersey 762 Texas 505 Washington 471 Wisconsin 446 Total 10,170 12-29