Saturday, April 14, 2007
Articles:
Job Migration
http://www.businesstimes.com.sg/sub/specialfocus/story/0,4574,229927,00.html?
Summary - more and more western companies are outsourcing work to India. this is because India can provide goods and services at a much lower price without compromising quality and also India represents a large field of potential customers. as these companies hire Indian workers, they lay off workers in their own country as there is no more need for them. this creates problems not only in the western companies but also in India as this creates a void in jobs in other sectors and creates a need for better infrastructure.
Globalisation's threat to 'jobs of the future'
http://www.businesstimes.com.sg/sub/views/story/0,4574,230187,00.html?
Summary - with jobs being outsourced to India and globalisation, citizens of the US are losing their jobs and becoming increasingly poorer. the US government must now come up with ways to deal with the situation. the article suggests that youths should be educated and prepared for jobs that will not be outsourced.
accessed on 10 April 2007
Reflections
Globalisation may bring economic benefits to larger companies and business as they become household names worldwide like. However globalization could pose a large problem for the governments of countries involves. With globalization, companies expand their businesses and gain world wide recognition, and demand for their goods increases. To meet the demands of the consumer and to maximize profits at the same time, these companies turn to other countries with cheaper labour costs to manufacture their goods instead of the countries in which they are based in. Countries such as Indian are becoming the preferred places for services to be outsourced.
The articles focus on the employment situation in the USA. With goods and services being outsourced to other countries like India, those in the same line in the US have no need for their jobs and are retrenched which increases the unemployment rate and job insecurity or employees receive a pay cut and struggle to make ends meet. As many as 28 million to 42 million people in the US could be affected.
The government of the US now faces the difficult task of solving this problem. They need to come up with ways to create more jobs for the unemployed, to provide an income for the jobless and also to pull people above the poverty line. If they were to provide welfare funds to the poor and unemployed, it would come at a loss to them or they would need to tax the more well-to-do individuals. Tax payers would surely cringe at the thought of parting with their money. Another option which they may consider would be to protect their own services and goods by heavily taxing foreign goods. This in turn may strain international relations and so the government has to handle the delicate situation brought on by globalization. Should they handle it inappropriately, the citizens of the country would be dissident and the government risks being voted out of office.
Countries that are being outsourced are the only countries with governments affected by globalization. On one hand, the government gains support when they allow businesses to set up office in the country providing more employment and a higher income and goods and services become more readily available.
However, with the presence of global businesses with recognized reputation and the help of their marketing department, the smaller local industries cannot compare especially since the larger companies has money to spare and can provide the same goods at a lower price. Locals patronize larger companies while the smaller businesses lose customers as they cannot compete. Most of the time, they do not have a fixed income and are forced to close up.
With more workers working for the Multi-National Corporation, there will be a lack of workers in other sectors. The first article predicts that India will be short of thousands of engineers because of globalization. The government must then find ways to attract people to take up that career choice to ensure the country continues to function perhaps by encourage people from other countries to migrate to India, if not, India could lack engineers and infrastructure will suffer.
At the same time, the government needs to provide infrastructure to support the growing industries. Some poorer countries lack the resources and capital to do so and hamper the progress of their economy. In addition, they need to think of ways to protect the workers from exploitation. Their government must ensure that their people are not overworked and underpaid however it may be because of these two characteristics that companies pick such countries – the workers work twice as hard but they’re paid a fraction of the cost. Governments must put in place guidelines to ensure that the MNCs are not the only ones who benefit from the arrangement.
Another source of concern for governments in places where work is outsourced to, they are criticised and questioned about riding the globalization train. Especially in India where culture and tradition have great importance, many would feel that giving in to globalization would mean sacrificing their heritage and are unwilling to do so. As a result of globalization, protests and strikes are rampant and the government must take action or see their state paralysed.
The government could also be criticized for globalizing for the development of the economy without any thought to other aspects like the environment. Large international offices set up factories and offices and very often bring pollution with them. Environmental groups or other countries may demand that the government protect the environment and more policies must be made to appease their demands. For a long time, India has been scrutinized for developing their economy at the cost of nature and not doing anything to help the environment like ratifying the Kyoto Protocol for example.
While globalization benefits the MNCs by providing them with a means to lower costs and increase profits, it is a major headache for governments as they deal with the effects of globalization. Although it could boost the economy by creating jobs in countries were work is outsourced to, globalization can just as easily destroy it like in the US where many are not needed to work anymore. Globalization has a significant impact on politics as it determines the actions taken by the government of the state to protect and aid their citizens. The first article also mentions that with this arrangement of outsourcing work, national boundaries have no effect or meaning anymore. This is something that every government would be shivering about.
Future Perfect; Political Expert
9:00 PM
