1. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three chapter twelve Concept Preview After reading this chapter, you should be able to: Labor Forces 1. recognize forces beyond management control that affect the availability of labor 2. understand the political and economic reasons that cause people to flee their home countries 3. explain why refugees are a source of labor but frequently a burden for the countries to which they flee 4. discuss guest workers and problems that may develop because of them

2. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three chapter twelve Concept Preview continued After reading this chapter, you should be able to: Labor Forces 5. explain how the composition of a country’s labor force affects productivity 6. name other forces that affect productivity 7. understand women’s positions in labor forces 8. discuss differences in labor unions from country to country 9. understand how labor is getting a voice in management

3. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three 12-3 Labor Forces  Labor mobility  Labor shortages and guest workers  Composition of labor force and productivity  Considerations in employment policies  Employer-employee relations

4. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three 12-4 Labor Mobility  Mobile, immigrant, economic or political refugees  guest workers of Europe  OPEC countries  Vietnamese  Mexico  South Africa  Population pressures  Political refugees  Cuba, East Germany, Viet Nam, Cambodia, China, Ethiopia, Rwanda  Economic refugees  Mexicans, Haitians  Guest workers  legally allowed to work in manual or menial jobs

5. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three Labor Shortages and Guest Workers  Economic problems  deport seasonal workers  “go home” bonuses  Racial problems  Switzerland, Germany  Natives outnumbered  Arab Gulf oil producing states 12-5

6. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three Composition of Labor Force and Productivity  Political refugees  wide range of skills  Guest workers  prepared to do specific jobs  Economic refugees  not with needed skills  Other effects on productivity  inexperienced workers  R&D  taxation  savings rates 12-6

7. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three Savings Rates 12-7 Figure 12.3 Household Saving as Percent of Household Income Sweden Norway Source: The Economist, March 29, 1997, p.115.

8. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three 12-8 Considerations in Employment Policies  Social status  Gender  Race  Minorities  Social status—a person’s status is established by caste or social group into which they are born

9. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three 12-9 Considerations in Employment Policies  Caste system in India  rules are rigid, those who deviate are shunned  no intermarriage  usually will not eat with each other  upper caste (15%) Hindus  laboring or shudra (50%)  casteless or untouchables (15%)  remaining (15%) belong to other religions  Class differences in Great Britain  Japan’s 17th century holdover  warrior-administrator at the top  farmers and artisans  merchants  slaughterers, butchers, tanners  (burakumin) or ghetto people

10. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three 12-10 Considerations in Employment Policies  Gender  degrees of women’s liberation range  fairly advanced in U.S. and Western Europe  virtually nil in many countries  employers have to consider sexist attitudes of host society  sexism is blatant in UN  Race  black versus white  USA, South Africa, UK  Arab-, Indian-, Pakistani- versus black  Chinese versus black  Japan’s Korean minority  Ugandan versus Chinese & Pakistani shop owners  Minorities  in some societies merchants, businesspeople, and bankers are looked down upon  people prefer to follow careers in politics, military, professional, agricultural

11. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three 12-11 Employer-Employee Relations  Labor statistics  Labor Unions  International Labor Activity  Codetermination  labor union representation onto the managing boards of directors

12. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three 12-12 Employer-Employee Relations Labor Market  Was the period abnormal for any of the countries?  Were the strikes peaceful, or were they accompanied by violence, destruction, or death?  Were the strikes industrywide, or were they only against selected employers?  Were the strikes wildcat (unannounced) or was there usually warning that they were coming?  Do the unions and the workers abide by labor agreements, and if not, what can the employer do?

13. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three Strikes 12-13 Figure 12.4 Working days lost per 1,000 employees, average 6,316 1,148 Source: The Economist, April 26, 1997, p.108.

14. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three 12-14 Employer-Employee Relations Labor Unions  European unions are usually identified with political parties and socialist ideology  US unions are more pragmatic than political and more concerned with immediate needs of workers  collect and disseminate information about companies  consult with unions in other countries  coordinate with unions’ political policies and tactics in dealing with some specific companies  encourage international companies’ codes of conduct  Labor legislation  US concerned with collective bargaining  Europe wages and working conditions  Europe  labor negotiations are conducted on a national level  Japanese unions  enterprise-based rather than industrywide

15. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three Fighting the Slide Union membership U.S. Union Members% of Work Force 194514,322,00035.5% 197019,381,00027.3 199516,360,00014.9 Source: Los Angeles Times, March 9, 1997, p. E1.. Figure 12.5 12-15

16. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three Worker Participation in Management  Codetermination—participation by workers in a company’s management  Works councils in the EU  Some experience in the US (UAW) 12-16

17. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three Labor Costs 12-17 Figure 12.6 Manufacturing, $ per hour, 1996 Source: The Economist, May 24, 1997, p. 104.