Global workforce refers to the international labor pool of workers, including those
employed
Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any oth ...
by
multinational companies
A multinational company (MNC), also referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation or a stateless corporation with subtle but contrasting senses, i ...
and connected through a global system of
networking and
production
Production may refer to:
Economics and business
* Production (economics)
* Production, the act of manufacturing goods
* Production, in the outline of industrial organization, the act of making products (goods and services)
* Production as a stati ...
,
foreign worker
Foreign workers or guest workers are people who work in a country other than one of which they are a citizen. Some foreign workers use a guest worker program in a country with more preferred job prospects than in their home country. Guest worke ...
s, transient
migrant worker
A migrant worker is a person who Human migration, migrates within a home country or outside it to pursue work. Migrant workers usually do not have the intention to stay permanently in the country or region in which they work.
Migrant worker ...
s,
remote work
Remote work, also called work from home (WFH), work from anywhere, telework, remote job, mobile work, and distance work is an employment arrangement in which employees do not commute to a central place of work, such as an office building, ware ...
ers, those in
export-oriented employment
Export-oriented employment refers to employment in multinational corporations' international industrial factories, usually located in developing countries. Such factories produce goods and services for sale in other countries. While these multina ...
,
contingent workforce
Contingent work, casual work, or contract work, is an employment relationship with limited job security, payment on a piece work basis, typically part-time (typically with variable hours) that is considered non-permanent. Although there is less jo ...
or other
precarious work
Precarious work is a term that critics use to describe non-standard or temporary employment that may be poorly paid, insecure, unprotected, and unable to support a household. From this perspective, globalization, the shift from the manufacturing se ...
. As of 2012, the global labor pool consisted of approximately 3 billion workers, around 200 million
unemployed
Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the referen ...
.
Structure of global labour
New international division of labor
The global workforce, or international labor pool, reflects a new international division of labor that has been emerging since the late 1970s in the wake of other forces of
globalization
Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...
. The
global economic factors driving the rise of
multinational corporation
A multinational company (MNC), also referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation or a stateless corporation with subtle but contrasting senses, i ...
s—namely, cross-border movement of
good
In most contexts, the concept of good denotes the conduct that should be preferred when posed with a choice between possible actions. Good is generally considered to be the opposite of evil and is of interest in the study of ethics, morality, ph ...
s,
services
Service may refer to:
Activities
* Administrative service, a required part of the workload of university faculty
* Civil service, the body of employees of a government
* Community service, volunteer service for the benefit of a community or a p ...
,
technology
Technology is the application of knowledge to reach practical goals in a specifiable and reproducible way. The word ''technology'' may also mean the product of such an endeavor. The use of technology is widely prevalent in medicine, science, ...
and
capital
Capital may refer to:
Common uses
* Capital city, a municipality of primary status
** List of national capital cities
* Capital letter, an upper-case letter Economics and social sciences
* Capital (economics), the durable produced goods used f ...
—are changing ways of thinking about labor and the structure of today's workforce. With roots in the social processes surrounding the shift to
standardization
Standardization or standardisation is the process of implementing and developing technical standards based on the consensus of different parties that include firms, users, interest groups, standards organizations and governments. Standardization ...
and
industrialization
Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive re-organisation of an econo ...
,
post-industrial society
In sociology, the post-industrial society is the stage of society's development when the service sector generates more wealth than the manufacturing sector of the economy.
The term was originated by Alain Touraine and is closely related to si ...
in the Western world has been accompanied by industrialization in other parts of the world, particularly in
Asia
Asia (, ) is one of the world's most notable geographical regions, which is either considered a continent in its own right or a subcontinent of Eurasia, which shares the continental landmass of Afro-Eurasia with Africa. Asia covers an area ...
. As industrialization takes hold worldwide and more cultures move away from
traditional
A tradition is a belief or behavior (folk custom) passed down within a group or society with symbolic meaning or special significance with origins in the past. A component of cultural expressions and folklore, common examples include holidays or ...
practices in respect to work and labor, the ways in which
employers
Employment is a relationship between two party (law), parties Regulation, regulating the provision of paid Labour (human activity), labour services. Usually based on a employment contract, contract, one party, the employer, which might be a co ...
think about and utilize labor are changing. Usually, barriers come into play such as different laws.
Labor supply
The global
supply of labor almost doubled in absolute numbers between the 1980s and early 2000s, with half of that growth coming from Asia.
At the same time, the rate at which new workers entered the
workforce
The workforce or labour force is a concept referring to the Pooling (resource management), pool of human beings either in employment or in unemployment. It is generally used to describe those working for a single types of companies, company or ...
in the Western world began to decline. The growing pool of global labor is accessed by employers in more advanced economies through various methods, including imports of goods,
offshoring
Offshoring is the relocation of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. Usually this refers to a company business, although state gover ...
of production, and
immigration
Immigration is the international movement of people to a destination country of which they are not natives or where they do not possess citizenship in order to settle as permanent residents or naturalized citizens. Commuters, tourists, and ...
.
Global labor arbitrage
Global labor arbitrage is an economic phenomenon where, as a result of the removal of or disintegration of barriers to international trade, jobs move to nations where labor and the cost of doing business (such as environmental regulations) is inex ...
, the practice of accessing the lowest-cost workers from all parts of the world, is partly a result of this enormous growth in the workforce. While most of the absolute increase in this global labor supply consisted of less-educated workers (those without higher education), the relative supply of workers with higher education increased by about 50 percent during the same period.
From 1980 to 2010, the global workforce grew from 1.2 to 2.9 billion people. According to a 2012 report by the McKinsey Global Institute, this was caused mostly by developing nations, where there was a "farm to factory" transition. Non-farming jobs grew from 54 percent in 1980 to almost 73 percent in 2010. This industrialization took an estimated 620 million people out of poverty and contributed to the economic development of China, India and others.
The Institute estimates that increased exports in developing countries contribute to one-fifth of non-farm jobs in those nations and that immigrants from developing countries contributed to 40 percent of the workforce in advanced ones. By 2008 foreign-born workers accounted for 17 percent of all STEM (science, technology, engineering and math) positions in the United States.
Employment and unemployment
Employment is growing fastest in emerging and developing economies. Over the past 5 years, the incidence of long-term unemployment (the share of unemployed persons out of work for 12 months or more) has increased 60% in the
advanced and developing economies for which data exist. Global unemployment is expected to approach 208 million in 2015, compared with slightly over 200 million in 2012.
From January 2012 to January 2013, Italy experienced the largest increase in its unemployment rate (+2.1 percentage points), followed by the Netherlands (+1.0 percentage point), and France (+0.6 percentage point). Over that same period, Canada experienced the largest decrease in its unemployment rate (−0.5 percentage points), followed by the United States (−0.4 percentage point).
The number of people employed in
precarious work
Precarious work is a term that critics use to describe non-standard or temporary employment that may be poorly paid, insecure, unprotected, and unable to support a household. From this perspective, globalization, the shift from the manufacturing se ...
(also called "vulnerable employment")— employment that is poorly paid, insecure, unprotected, and cannot support a household—has increased dramatically in recent decades. This includes
Part-time job
A part-time job is a form of employment that carries fewer hours per week than a full-time job. They work in shifts. The shifts are often rotational. Workers are considered to be part-time if they commonly work fewer than 30 hours per week. Accord ...
s,
self-employment
Self-employment is the state of working for oneself rather than an employer. Tax authorities will generally view a person as self-employed if the person chooses to be recognised as such or if the person is generating income for which a tax return n ...
or
freelancer
''Freelance'' (sometimes spelled ''free-lance'' or ''free lance''), ''freelancer'', or ''freelance worker'', are terms commonly used for a person who is self-employed and not necessarily committed to a particular employer long-term. Freelance w ...
s,
homeworkers, fixed-term or
temporary work
Temporary work or temporary employment (also called gigs) refers to an employment situation where the working arrangement is limited to a certain period of time based on the needs of the employing organization. Temporary employees are sometimes ...
, on-call work, and other
contingent workforce
Contingent work, casual work, or contract work, is an employment relationship with limited job security, payment on a piece work basis, typically part-time (typically with variable hours) that is considered non-permanent. Although there is less jo ...
jobs.
Demographic trends
![2017 world map, median age by country](https://upload.wikimedia.org/wikipedia/commons/b/b7/2017_world_map%2C_median_age_by_country.svg)
These numbers show that, globally, the structure of the workforce has been changing. In addition to the economic and social factors described above, a large part of this restructuring is also due to
demographic
Demography () is the statistical study of populations, especially human beings.
Demographic analysis examines and measures the dimensions and dynamics of populations; it can cover whole societies or groups defined by criteria such as edu ...
factors, changes in the structure of the world's population. In wealthier countries with more advanced economies, fewer people die from
communicable diseases and, overall,
life expectancies are much longer while
birth rate
The birth rate for a given period is the total number of live human births per 1,000 population divided by the length of the period in years. The number of live births is normally taken from a universal registration system for births; populati ...
s are lower. In these areas, the overall median age is rising (see
List of countries by median age
This article is a list of countries by median age.
Methodology
The median age is the index that divides the entire population into two numerically equal age groups, one younger than that age and the other older than that age. It is the only in ...
). The youngest populations, primarily those in
Southeast Asia
Southeast Asia, also spelled South East Asia and South-East Asia, and also known as Southeastern Asia, South-eastern Asia or SEA, is the geographical United Nations geoscheme for Asia#South-eastern Asia, south-eastern region of Asia, consistin ...
and
Africa
Africa is the world's second-largest and second-most populous continent, after Asia in both cases. At about 30.3 million km2 (11.7 million square miles) including adjacent islands, it covers 6% of Earth's total surface area ...
, are those in which overall life expectancies are lower—many children and some adults still die from communicable diseases—but the birth rate is also high.
Global worker mobility
The movement of individuals across
nation
A nation is a community of people formed on the basis of a combination of shared features such as language, history, ethnicity, culture and/or society. A nation is thus the collective identity of a group of people understood as defined by those ...
al,
region
In geography, regions, otherwise referred to as zones, lands or territories, are areas that are broadly divided by physical characteristics (physical geography), human impact characteristics (human geography), and the interaction of humanity and t ...
al,
cultural
Culture () is an umbrella term which encompasses the social behavior, institutions, and Social norm, norms found in human Society, societies, as well as the knowledge, beliefs, arts, laws, Social norm, customs, capabilities, and habits of the ...
, or
linguistic
Linguistics is the scientific study of human language. It is called a scientific study because it entails a comprehensive, systematic, objective, and precise analysis of all aspects of language, particularly its nature and structure. Linguis ...
boundaries has been referred to as "global mobility." This global workforce mobility impacts an employer's ability to provide goods or services to users and consumers.
Management
Management (or managing) is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business.
Management includes the activities o ...
theory attempts to address these movements of globally mobile individuals ranging from business
expatriates
An expatriate (often shortened to expat) is a person who resides outside their native country. In common usage, the term often refers to educated professionals, skilled workers, or artists taking positions outside their home country, either ...
to more recently identified groups such as self-initiated expatriates, international business travelers, international commuters, and "flexpatriates" (short-term assignees and international commuters).
Movement of people across national borders is becoming increasingly common. Traditionally, this has been described in terms of push and pull forces that drive
migrant workers
A migrant worker is a person who migrates within a home country or outside it to pursue work. Migrant workers usually do not have the intention to stay permanently in the country or region in which they work.
Migrant workers who work outsi ...
and
immigrant laborers toward more developed countries. However, not all
labor mobility
Labor or worker mobility is the geographical and occupational movement of workers. Impediments to mobility are easily divided into two distinct classes with one being personal and the other being systemic. Personal impediments include physical loca ...
is outward movement toward more advanced economies. An increasing number of individuals move to less developed countries to provide new expertise or return their expertise to their country of origin. This includes a return movement or repatriation of internationally relocated individuals such as immigrants,
refugee
A refugee, conventionally speaking, is a displaced person who has crossed national borders and who cannot or is unwilling to return home due to well-founded fear of persecution. s, sojourners,
retiree
A pensioner is a person who receives a pension, most commonly because of retirement from the workforce. This is a term typically used in the United Kingdom (along with OAP, initialism of old-age pensioner), Ireland and Australia where someone of p ...
s,
military
A military, also known collectively as armed forces, is a heavily armed, highly organized force primarily intended for warfare. It is typically authorized and maintained by a sovereign state, with its members identifiable by their distinct ...
personnel, international
students
A student is a person enrolled in a school or other educational institution.
In the United Kingdom and most commonwealth countries, a "student" attends a secondary school or higher (e.g., college or university); those in primary or elementary ...
, or other expatriates. Such movements of people may influence interstate relationships concerning politics, economics and culture. Thus, global workforce mobility research is relevant to both host and home country policies. From a focus on longer-term and assigned expatriation, current research is focusing on the drivers and dynamics of a range of new alternative forms of global mobility in the workforce.
Reviews on global workforce mobility have been recently published by
Caligiuri and Bonache, and Collings and Sheeran.
Implications
Social vulnerability
One issue related to the shift of employment to countries with an overall younger population has to do with the
dependency ratio
The dependency ratio is an age-population ratio of those typically not in the labor force (the ''dependent'' part ages 0 to 14 and 65+) and those typically in the labor force (the ''productive'' part ages 15 to 64). It is used to measure the press ...
in differing countries. The dependency ratio is an age-population ratio of those typically not in the labor force (the dependent part) and those typically in the labor force (the productive part). A high dependency ratio can cause serious problems for a country if a large proportion of a government's expenditure is on health, social security & education, which are most used by the youngest and the oldest in a population. The fewer people of working age, the fewer the people who can support
school
A school is an educational institution designed to provide learning spaces and learning environments for the teaching of students under the direction of teachers. Most countries have systems of formal education, which is sometimes compuls ...
s, retirement
pension
A pension (, from Latin ''pensiō'', "payment") is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments ...
s,
disability pensions and other assistances to the youngest and oldest members of a population, often considered the most
vulnerable members of
society
A society is a group of individuals involved in persistent social interaction, or a large social group sharing the same spatial or social territory, typically subject to the same political authority and dominant cultural expectations. Socie ...
.
Downward pressure on wages
Another issue can arise in regard to the capital-labor ratio in the
global population
In demographics, the world population is the total number of humans currently living. It was estimated by the United Nations to have exceeded 8 billion in November 2022. It took over 200,000 years of human prehistory and history for the ...
. Freeman (2010) holds that the new entrants to the global workforce since the 1980s brought little
capital
Capital may refer to:
Common uses
* Capital city, a municipality of primary status
** List of national capital cities
* Capital letter, an upper-case letter Economics and social sciences
* Capital (economics), the durable produced goods used f ...
with them, either because they were poor or because the capital they had was of little economic value.
He estimates that the entry of
China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
,
India
India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
and the
Eastern Bloc
The Eastern Bloc, also known as the Communist Bloc and the Soviet Bloc, was the group of socialist states of Central and Eastern Europe, East Asia, Southeast Asia, Africa, and Latin America under the influence of the Soviet Union that existed du ...
into the global economy cut the global capital-labor ratio to around 55–60% of what it otherwise would have been. The capital-labor ratio, according to Freeman, is a critical determinant of the wages paid to workers and of the returns to capital. The more capital each worker has, the higher will be their productivity and pay. Even considering the high savings rate of new entrants—he cites
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
estimates that China has a savings rate of 40% of GDP—he estimates it would take 30 or so years for the world to re-attain the capital-labor ratio among the countries that had previously made up the global economy. This, along with the effects of the
Great Recession
The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
, could mean that downward pressure on
wage
A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as ''minimum wage'', ''prevailing wage'', and ''yearly bonuses,'' and remuner ...
s and
compensation, particularly in more advanced economies, will continue for the foreseeable future.
Race to the bottom
"Race to the bottom" is a phrase coined to describe the potential outcome of companies searching for the lowest-cost in all their business needs. For example, lowest taxes and tariffs, land, materials, labor, etc. In terms of global labor arbitrage, the lowest-cost labor is often found in countries that have the fewest protections for workers. Such protections, collectively known as
labor rights
Labor rights or workers' rights are both legal rights and human rights relating to labor relations between workers and employers. These rights are codified in national and international labor and employment law. In general, these rights influen ...
, include regulation of
child labor
Child labour refers to the exploitation of children through any form of work that deprives children of their childhood, interferes with their ability to attend regular school, and is mentally, physically, socially and morally harmful. Such e ...
,
workplace safety,
work hours
Working(laboring) time is the period of time that a person spends at paid labor. Unpaid labor such as personal housework or caring for children or pets is not considered part of the working week.
Many countries regulate the work week by law, s ...
,
minimum wage
A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. Bec ...
s, and the availability of
collective bargaining
Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The i ...
. One potential outcome of widespread global labor arbitrage, then, is
exploitation
Exploitation may refer to:
*Exploitation of natural resources
*Exploitation of labour
** Forced labour
*Exploitation colonialism
*Slavery
** Sexual slavery and other forms
*Oppression
*Psychological manipulation
In arts and entertainment
*Exploi ...
and even
death
Death is the irreversible cessation of all biological functions that sustain an organism. For organisms with a brain, death can also be defined as the irreversible cessation of functioning of the whole brain, including brainstem, and brain ...
of workers in countries that have the fewest protections. Another potential outcome is an
undermining of the protections that are already in place in some countries; that is, a pressure to lower
domestic
Domestic may refer to:
In the home
* Anything relating to the human home or family
** A domestic animal, one that has undergone domestication
** A domestic appliance, or home appliance
** A domestic partnership
** Domestic science, sometimes c ...
and, ultimately,
international labor standards
International labour law is the body of rules spanning public and private international law which concern the rights and duties of employees, employers, trade unions and governments in regulating Work (human activity) and the workplace. The Interna ...
. One example of this is employer abuse of
guest worker program A guest worker program allows foreign workers to temporarily reside and work in a host country until a next round of workers is readily available to switch. Guest workers typically perform low or semi-skilled agricultural, industrial, or domesti ...
s wherein employers act to sponsor
guest worker
Foreign workers or guest workers are people who work in a country other than one of which they are a citizen. Some foreign workers use a guest worker program in a country with more preferred job prospects than in their home country. Guest worker ...
s at lower wages in order to decrease the overall domestic standard wage for workers in a given occupation, such as with
Information technology
Information technology (IT) is the use of computers to create, process, store, retrieve, and exchange all kinds of data . and information. IT forms part of information and communications technology (ICT). An information technology system (I ...
workers in the United States.
Mitigating factors
However, other forces may mitigate these processes. Some observe that a growing number of
multinationals, especially from wealthier areas, are starting to see the benefits of keeping more of their operations close to home. For many products, labor is a small and diminishing fraction of total costs. Long, complex
supply chain
In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, acti ...
s, it turns out, are likely riskier than many firms may have realized. For example, when an epidemic such as
SARS
Severe acute respiratory syndrome (SARS) is a viral respiratory disease of zoonotic origin caused by the severe acute respiratory syndrome coronavirus (SARS-CoV or SARS-CoV-1), the first identified strain of the SARS coronavirus species, ''sever ...
hits Asia or when an earthquake hits Japan, supply chains are disrupted. Also, as emerging economies boom, wages there are rising. The benefits of global labor arbitrage may disappear, particularly in
basic manufacturing and especially in China, where wages have been rising the fastest.
See also
*
Contingent workforce
Contingent work, casual work, or contract work, is an employment relationship with limited job security, payment on a piece work basis, typically part-time (typically with variable hours) that is considered non-permanent. Although there is less jo ...
*
Globalization
Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...
*
Labor mobility
Labor or worker mobility is the geographical and occupational movement of workers. Impediments to mobility are easily divided into two distinct classes with one being personal and the other being systemic. Personal impediments include physical loca ...
*
Labor rights
Labor rights or workers' rights are both legal rights and human rights relating to labor relations between workers and employers. These rights are codified in national and international labor and employment law. In general, these rights influen ...
*
List of countries by labor force
*
Multinational corporation
A multinational company (MNC), also referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation or a stateless corporation with subtle but contrasting senses, i ...
*
Workforce
The workforce or labour force is a concept referring to the Pooling (resource management), pool of human beings either in employment or in unemployment. It is generally used to describe those working for a single types of companies, company or ...
*
World economy
The world economy or global economy is the economy of all humans of the world, referring to the global economic system, which includes all economic activities which are conducted both within and between nations, including production, consumption, ...
References
Further reading
*
*
*
*
*
*
External links
International Labour OrganisationThe Journal of Global Mobility(Launched in 2013)
{{Globalization
Employment of foreign-born
Strategic management