1. Chapter 09 Labor Forces McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Overall Size of the Workforce 2010 World Population – 6.8 billion –48% < 25 years –31% < 15 years 2010 World Population – 6.8 billion –48% < 25 years –31% < 15 years Developing Nations: – younger, growing populations due to high birth rate and reduced infant mortality Developed Countries: –Population decline due to low birthrate and low immigration Developing Nations: – younger, growing populations due to high birth rate and reduced infant mortality Developed Countries: –Population decline due to low birthrate and low immigration 9-2

3. Unemployment Global Unemployment – 6.6% –34 million increase over 2007 with 2/3 in developed countries Global Unemployment – 6.6% –34 million increase over 2007 with 2/3 in developed countries Projections: –Employment Growth: SLOW –Recovery: Labor LAGGING behind economic recovery! Unemployment Rates – SLOW reduction Projections: –Employment Growth: SLOW –Recovery: Labor LAGGING behind economic recovery! Unemployment Rates – SLOW reduction LO1 9-3

4. Vulnerable Workforce: Self-employed or contributing family members –No contracts or formal work arrangements –Characteristics: Inadequate earnings Low productivity Difficult work conditions that undermine fundamental work rights Found in all economies but most in developing countries Growing worldwide Self-employed or contributing family members –No contracts or formal work arrangements –Characteristics: Inadequate earnings Low productivity Difficult work conditions that undermine fundamental work rights Found in all economies but most in developing countries Growing worldwide Aging Populations: 2010: 7.6% was 65 + years old, getting older in developed countries Projected to grow by 8.4% in 2015 and 16.4% by 2050 2010: 7.6% was 65 + years old, getting older in developed countries Projected to grow by 8.4% in 2015 and 16.4% by 2050 LO1 9-4

5. Urbanization of Workforce Global Shifts from Rural to Urban: –1950: < 25% lived in urban areas –2010: 50% urban –2030: 60% urban –Developing countries: 4x faster than developed countries Global Shifts from Rural to Urban: –1950: < 25% lived in urban areas –2010: 50% urban –2030: 60% urban –Developing countries: 4x faster than developed countries Impacts: Shift from agriculture to industry or service sectors Growing low-cost, low-skill labor pool Large % classified as “vulnerable workforce” Quick to learn industrial skills Social & psychological problems with adjusting to industry & service sectors Impacts: Shift from agriculture to industry or service sectors Growing low-cost, low-skill labor pool Large % classified as “vulnerable workforce” Quick to learn industrial skills Social & psychological problems with adjusting to industry & service sectors LO1 9-5

6. Immigrant Labor Facts: –1850-1970: 60 million Europeans left for overseas work –By end of WWII: 30 million S. Europeans & N. Africans went to 8 European countries –2005: 191 million living out of birth country –2008 - U.S.: 5% of world population and 20% of world’s immigrants Facts: –1850-1970: 60 million Europeans left for overseas work –By end of WWII: 30 million S. Europeans & N. Africans went to 8 European countries –2005: 191 million living out of birth country –2008 - U.S.: 5% of world population and 20% of world’s immigrants Reasons: –Seeking better economic conditions –Global labor supply & demand –Less strict regulations Migrant Labor Skills: –Highly Skilled: Medicine, IT –Low Skill: Ag, domestic service, 3-D” jobs – “dirty, dangerous & degrading” Reasons: –Seeking better economic conditions –Global labor supply & demand –Less strict regulations Migrant Labor Skills: –Highly Skilled: Medicine, IT –Low Skill: Ag, domestic service, 3-D” jobs – “dirty, dangerous & degrading” LO1 9-6

7. Child Labor Facts: –UNICEF : “158 million, 5-14 year olds work in conditions that fail to meet basic needs in exploitative, hazardous or illegal conditions” –Child Labor exists in all countries but mostly in developing countries –7% of child labor is in agriculture Facts: –UNICEF : “158 million, 5-14 year olds work in conditions that fail to meet basic needs in exploitative, hazardous or illegal conditions” –Child Labor exists in all countries but mostly in developing countries –7% of child labor is in agriculture UNICEF’s Convention on Rights of the Child (CRC): 1.Nondiscrimination 2.Devotion to the best interests of the child 3.Right to life, survival & development 4.Respect for views of the child UNICEF’s Convention on Rights of the Child (CRC): 1.Nondiscrimination 2.Devotion to the best interests of the child 3.Right to life, survival & development 4.Respect for views of the child LO1 9-7

8. Forced Labor 12.3 million women, children & low-income men affected 59% are women and girls forced in: servitude, domestic work, sweatshops, prostitution –South & East Asia –North & West Africa –Latin America – U.S. 12.3 million women, children & low-income men affected 59% are women and girls forced in: servitude, domestic work, sweatshops, prostitution –South & East Asia –North & West Africa –Latin America – U.S. U.S. State Department’s Trafficking in Persons Report includes: –Bonded labor –Involuntary servitude –Debt bondage –Involuntary domestic servitude –Forced child labor –Child soldiers –Sex trafficking, prostitution, –Children exploited for sex, and child sex tourism –Prison labor is “forced labor” –Descent-based slavery U.S. State Department’s Trafficking in Persons Report includes: –Bonded labor –Involuntary servitude –Debt bondage –Involuntary domestic servitude –Forced child labor –Child soldiers –Sex trafficking, prostitution, –Children exploited for sex, and child sex tourism –Prison labor is “forced labor” –Descent-based slavery LO1 9-8

9. Brain Drain Brain Drain: – A country’s loss of its most intelligent and best- educated people –Record numbers of scientists, IT pros, engineers, teachers & health care professionals move to OECD countries, NOT just the U.S. –Reasons – Better: Salary Standard of living Research Social environment Brain Drain: – A country’s loss of its most intelligent and best- educated people –Record numbers of scientists, IT pros, engineers, teachers & health care professionals move to OECD countries, NOT just the U.S. –Reasons – Better: Salary Standard of living Research Social environment Reverse Brain Drain: –Highly skilled immigrants returning home after contributions to host country because of U.S. outsourcing of knowledge work in engineering, software, product design and development to India China Russia Reverse Brain Drain: –Highly skilled immigrants returning home after contributions to host country because of U.S. outsourcing of knowledge work in engineering, software, product design and development to India China Russia LO1 9-9

10. Guest Workers People who legally go to foreign countries to perform certain types of jobs in: –Service work –Factory work –Construction People who legally go to foreign countries to perform certain types of jobs in: –Service work –Factory work –Construction Why? –Countries with low birth rates & labor shortages need labor – France, Germany, Switzerland & Scandinavia Issues: –Good in growing economy –Bad in slow economic growth with excess labor and governments don’t reissue labor permits Why? –Countries with low birth rates & labor shortages need labor – France, Germany, Switzerland & Scandinavia Issues: –Good in growing economy –Bad in slow economic growth with excess labor and governments don’t reissue labor permits LO1 9-10

11. Sexism Patriarchal values inherent in many cultures deny women equal participation in society: –Saudi Arabia, Middle Eastern country laws & traditions prevent mix- gendered workplaces Patriarchal values inherent in many cultures deny women equal participation in society: –Saudi Arabia, Middle Eastern country laws & traditions prevent mix- gendered workplaces Facts: –Women hold <25% of senior management positions worldwide –1/3 of private companies have no women in senior management –Women’s education is increasing, illiteracy declining with their economic impact growing Facts: –Women hold <25% of senior management positions worldwide –1/3 of private companies have no women in senior management –Women’s education is increasing, illiteracy declining with their economic impact growing LO2 9-11

12. Racism Racism: –Racial conflict & discrimination is world- wide Globalization: –Increases contact between very different people –May eventually minimize racism by valuing differences –May cause growing racism! Racism: –Racial conflict & discrimination is world- wide Globalization: –Increases contact between very different people –May eventually minimize racism by valuing differences –May cause growing racism! LO2 9-12

13. Minorities in Traditional Societies Traditional Societies present HR Problems & Opportunities: –Merchants, bankers & business people scored in some societies –Outsiders may dominate local commerce Traditional Societies present HR Problems & Opportunities: –Merchants, bankers & business people scored in some societies –Outsiders may dominate local commerce Advantages to Foreign Employers: –Skilled minorities immediately available –Speak local language + others –Less nationalistic than locals Disadvantages: –Unpopular with locals –High dependence on minority employees –Discrimination against minorities may result Advantages to Foreign Employers: –Skilled minorities immediately available –Speak local language + others –Less nationalistic than locals Disadvantages: –Unpopular with locals –High dependence on minority employees –Discrimination against minorities may result LO2 9-13

14. Labor in Developing Nations Challenges: –Poverty: Low educational levels affect quality of labor force –HIV/AIDS: Creates social unrest and labor shortages with “up-skilling” a major challenge –Outsourcing: Developed Country: Outbound job transfers seen as problem Developing Country: Economic growth seen as benefit of globalization Challenges: –Poverty: Low educational levels affect quality of labor force –HIV/AIDS: Creates social unrest and labor shortages with “up-skilling” a major challenge –Outsourcing: Developed Country: Outbound job transfers seen as problem Developing Country: Economic growth seen as benefit of globalization LO2 9-14

15. Labor Unions: Europe, U.S., & Japan Labor Unions are “ Organizations of workers” –Serve different country purposes –Influence employee matters differently –European labor unions are socialist or democratic party affiliated –“Worker identity” is common Labor Unions are “ Organizations of workers” –Serve different country purposes –Influence employee matters differently –European labor unions are socialist or democratic party affiliated –“Worker identity” is common U.S.: – “Collective Bargaining” used to negotiate with management –Adversarial with management Europe: –Governments set wage & working conditions –Adversarial with management Japan: –Strong identification with company interests U.S.: – “Collective Bargaining” used to negotiate with management –Adversarial with management Europe: –Governments set wage & working conditions –Adversarial with management Japan: –Strong identification with company interests LO3 9-15

16. Multinational Labor Activities Companies escape unionization by outsourcing and production transfer to other countries Unions’ response: –Collect and disseminate company’s information –Consult with unions in other countries –Coordinate policies and tactics with those unions –Encourage international company codes of conduct Unions’ response: –Collect and disseminate company’s information –Consult with unions in other countries –Coordinate policies and tactics with those unions –Encourage international company codes of conduct LO3 9-16