Labor Forces McGraw-Hill/Irwin International Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. chapter twelve

12-3 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.

12-4 Learning Objectives  Discuss differences in labor unions among countries

12-5 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

12-6 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

12-7 Primary Occupation of National Labor Force Source: (July 25, 2006).

12-8 Aging Of Population Source: U.S. Census Bureau, International, “Midyear Population, by Age and Sex,” (July 27, 2006).

12-9 Rural to urban Shift Source: World Urbanization Prospects: The 2003 Revision (New York: United nations, 2003), pp. 3-4.

12-10 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%)

12-11 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

12-12 Foreign and Foreign-Born Population in Selected OECD Countries

12-13 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

12-14 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

12-15 Brain Drain: Countries with the Highest Percentage of Their College-Educated Citizens Living in Other Countries

12-16 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

12-17 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

12-18 Women’s Education Studies show a direct correlation between women’s education and –Birthrates –Child survival rates –Family health –A nation’s overall prosperity

12-19 Female Illiteracy

12-20 Ratio of Wages, Woman versus Men, Selected OECD Countries

12-21 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

12-22 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

12-23 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

12-24 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, c Crown Copyright. Reproduced under the terms of the Click-Use License.

12-25 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

12-26 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

12-27 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

12-28 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

12-29 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