2. 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 © The McGraw-Hill Companies, Inc. All rights reserved.

3. 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
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4. 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
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5. 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
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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

6. 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
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7. 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
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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

8. 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
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9. 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
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10. 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
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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

11. 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
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12. 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
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13. 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)
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14. 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
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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

15. 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
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16. 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
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17. 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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18. 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?
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19. 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
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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

20. 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
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21. 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
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22. 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
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23. 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
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24. 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
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25. 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
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26. Female labor force participation rates by age group, selected economies
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27. Annual hours worked per person, selected developed (industrialized) economies
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28. Percentage change in real wages, selected economies

29. Labor productivity, total economy, selected developed (industrialized) economies
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30. 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
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