How positive is influence of globalisation on labour markets in developing countries?

How positive is influence of globalisation on labour markets in developing countries?

Globalisation is an inevitable phenomenon in human history that is been bringing the world closer through the exchange of goods and products, information, knowledge and culture. Globalisation has more or less influence on every country in the world. There are a lot of disputes about whether there is a more positive or more negative influence of globalization on the developing countries. According to The Economist (2001, 10), people who live in developing countries “are even more likely than their rich-country counterparts to benefit, because they have less to lose and more to gain”. However, this question is complex and in this essay it will be argued in relation to the impact of globalisation on labour markets in developing countries. This essay will discuss that globalisation has largely positive influence on the labour markets in developing countries. Some advantages and disadvantages relative to three general points of essay, namely money flow changes, migration processes, and usage of child labour, will be presented.

Firstly, one of the most significant consequences of globalisation is that there are more ways of money flow, especially from rich regions of the world to the poorest countries. However, it is not always positive for labour markets in these countries. Some people might agree that trade is good for economic growth but at the same time they would say that growth is not necessarily good for poor workers. Capital inflow makes economies less stable, exposing workers to the risk of financial crisis (The Economist, 2001). For instance, many countries in Africa have failed to share in the gains of globalisation. Their export remains limited to a narrow range of raw materials (The World Bank Online, 2013). On the other hand, we cannot blame globalisation alone for holding Africa back. As Survey said, “Africa has been left out of the global economy, partly because its governments used to prefer it that way” (The Economist, 2001, 13).

Furthermore, there is solid evidence that poor people receive benefits from country’s growth, because developing countries that have achieved sustained and rapid growth are doing well in reducing poverty. Studies show that, in 80 countries across the world over the past 40 years, the incomes of the poor have raised one for one with overall growth (The Economist, 2001). For example, according to the World Bank (2013), China had the largest poverty reduction in history: between 1990 and 2005, poverty rates in the country fell from 60% to 16%, leaving 475 million fewer people in poverty. The World Bank (2013) also suggests, that there are some more examples of countries, which have profited from globalisation: India has cut its poverty rate in half in the past two decades. In Uganda poverty fell 40% during the 1990s and school enrollments doubled. Surveys of the Vietnam's poorest households show 98% of people improved their living conditions in the 1990s (The World Bank, 2013).

Secondly, globalisation is usually associated with the amplifying trend of international labour migration. Poor people from developing countries seek economic and social opportunities in better-off regions and so they make their decision to move. The interrelation between migration and social and economic changes becomes more complicated. Migration processes are one of the main factors of social transformation and development in both countries accepting migrants and countries of their origin. Net number of migrants from less developed regions to more developed ones reached 17,412,000 people in the period from 2005 to 2010. The graph below compares the net number of migrants in thousands of people from different regions during the period from 2005 to 2010. The information used to compile this graph was provided in “World Population Prospects: The 2012 Revision” by United Nations (United Nations, 2013).

Globalisation has both a negative and positive impacts on migration. The main counterargument against migration is that workers from poor countries receive a smaller wage when they work abroad comparing to local citizens. It is true; migrants agree to work for a cheaper price, thus it makes them more attractive for employers who want to save on costs (The Economist, 2001). On the other hand, even this low salary usually is much higher, than those salaries poor workers could get back home. This income gives them the opportunity to improve their living conditions and provide their families with money. Furthermore, emigration can help to reduce pressure of the excess supply on a labour market of developing country and to reduce its unemployment. Poor countries expect temporary migrants to come back home with the experience and qualification they received abroad, which leads to investments into the economy. Less developed countries can receive benefits from money transfers of the migrants working abroad to their families and relatives.

The final problem is the problem of the child labour exploitation in many developing countries. This problem evokes a wide response in society all over the world. It has been claimed that globalisation has strong negative influence on child labour usage, due to popular belief that foreign trade promotes distribution of exploitation of children. A lot of famous international companies, such as Nike, were blamed for using child labour on their factories, placed in developing countries (Polakoff, 2007). This kind of news always causes a lot of protests among rich countries citizens. They argue that in a pursuit of profit the international corporations deprive the children of their childhood. According to Polakoff (2007, 264), children get exploited easily ‘because they are less aware of their rights, less troublesome, more compliant, more trustworthy and less likely to absent themselves from work’. This view seems valid, but there is also another side to the situation. It cannot be forgotten, that even though child labour is considered as immoral, a lot of children from poor countries independently choose the opportunity to work in order to feed themselves and their families. As The Economist suggests, although if child labour was strictly eradicated this would not mean that children will go to school instead. It is more likely that they will be driven to scrape a living in even crueler conditions, as they will be forced to do crime or prostitution (The Economist, 2001).

Furthermore, there is a greater probability to believe that globalisation has more positive impact on that problem rather than negative. Developed countries are taking measures to improve living conditions for children all over the world, to protect their rights and to prevent them from going to work before they turn at least 15 years old. The first World Day Against Child Labour was launched by the International Labour Organization (ILO) in 2002 as a way to highlight the plight of these children (International Labour Organization a, 2013). In 1992 this organization began the International Program on the Elimination of Child Labour (IPEC), it has worked to reach its goals in several ways: through the programs based in the countries which promote political reform, construct institutional potential and put in place certain measures to finish child labor; and through the increasing of awareness and mobilization intended to change the social relations and to promote ratification and effective introduction of ILO child labour Conventions. These efforts led to hundred thousands of children withdrawn from work, and rehabilitated or interfered to enter into labor (International Labour Organization b, 2013).

To sum up, despite sceptics’ opinion about negative impact of globalisation on the poor workers in developing countries, they are more likely to receive a lot of benefits from the globalisation process. Developing foreign trade and investments provide a money flow from rich to poor countries so they can reduce their poverty and improve people’s living conditions, as China did. Furthermore, globalisation allows poor people to migrate more freely all over the world in order to find job with bigger salary and to risen the qualification skills. Countries of their origin also profit from temporary labour migration because they receive money transfers from these workers, as well as their working experience. Last, but not least, globalisation helps to eliminate the extremely important problem of developing countries - child labor. The attention of global society to this problem has led to certain measures being undertaken by international organizations like International Labour Organization. Everything aforesaid allows to conclude that globalisation has largely positive influence on labour markets in developing countries.
Bibliography

1 (a) International Labour Organisation (2013), Campaign and advocacy, [online] available at www.ilo.org/ipec/Campaignandadvocacy (accessed at 20/08/13)
1 (b) International Labour Organisation (2013), International Programme on the Elimination of Child Labour (IPEC), [online] available at www.ilo.org/ipec (accessed at 20/08/13)
2 Polakoff E.G. (2007), “Globalization and Child Labor”, London, SAGE Publications
3 The Economist (2001), “Survey: Grinding the Poor”, The Economist, p.10-15, [online] available at http://www.economist.com/node/796037 (accessed at 13/08/13)
4 The World Bank (2013), About us, [online] available at www.theworldbank.org.v7bje9fd30 (accessed at 17/08/13)
5 United Nations (2013), World Population Prospects: The 2012 Revision, [online] available at www.esa.un.org (accessed at 17/08/13)