The impact of globalisation to Australia labour forces

Might be benefited for economics students.

Executive Summary

This report focuses on the impact of globalisation to Australia labour forces. The purposes of it are to evaluate the impact of globalisation to the future of labour forces in Autralia,how it benefits the market labour and what the government needs to do to save the future of the labours. Globalisation brings pros and cons to the communities and industries in Australia especially to the labour market. Employees in Australia will face major impact due to globalisation. It will not only affect their wages but as well as their costs of living. The low wages and inequality distribution of incomes among the workers lead to high poverty in a country. On the other hand, globalisation create international movement of labour for skilled individuals to apply posotions in almost any country in the world. It also involves potential impact of changes in the global market of economics where there is a potential entry of international competitors into Australia markets. This report will focus on the impact of globalisation to the shortages of skilled workers, increase unemployment rates and inequality in earning, low wages offered and potential changes in global markets on economies. 

Introduction

            In the past two decades, the Australian economy has experienced fundamental changes influenced by the increasing propagation of globalisation. Globalisation means the fact that different cultures and economic systems around the world are becoming connected and similar to each other because of the influence of large multinational companies and improved communication ( Oxford Dict. 2011, pg. 633). Globalising forces have reduced barriers to labour mobility across countries and economies. It increase the demand for highly skilled workers. It affects the availabe of domestic supply for skilled workers due to high domestic demand of them across national economies. It gives impact to the Australian labour market on the shortages of skilled labours in Australia. As the economy becomes more global, the labour markets in Australia also has undergone significant change to skilled and unskilled workers. Investors are freely to move their capital throughout the world to search for more profitable ventures and locations with lower labour costs. Free trade, common market agreements and new information technologies have edged some industries and workers out of the market. However, they have allowed others to prosper. It create inequatibility to the workers in Australia. It should be clear that globalisation could effect the union bargaining strength and workers’ incentive to unionise, with straightforward implications for equilibrium relative wages (Noel Gaston, vol.15, 2008). This report will reveal the impact of globalisation to the labour forces. There will be shortage supply of skilled workers in the labour markets, increase unemployment rates, lower wages to the skilled and unskilled local labours and potential changes in the global market on economies .

Shortages Skilled Workers

The international movement of workers has been growing since 1960’s. One of the important facet globalisation Australia has experienced is the lack of restrictions on the movement of labour within Australia and between Australia and the world. Increase demand for skilled labours globally create a significant and growing number of people internationally. This phenomenon extends to the Australian’s residents leaving their country to work overseas. Many of them are highly skilled workers. Highly skilled workers are those with a university education, namely a postgraduate degree, bachelor degree or gradute diploma. The level of wages offered by others countries are often more than double that they currently receive. For example, newspapers such as the Australian or Sydney Morning Herald offers Australian school teachers jobs in place such as China, Indonesia, Saudi Arabia, England, Canada and the USA with more than double wages that they earn. It causes highly skilled worker to find jobs outside Australia due to high salaries being offered overseas, especially due to the current low value of the Australian dollar. If the problem continously happen without urgent action being taken, it will give a bad impact to the communities in Australia.

Increase Unemployment Rates

Due to gobalisation, manufacturing jobs that were previously unionised have lost their union protection and shifted outside the boarders of western economies to less developed nations. At the same time, service sectors have expanded, providing more part time than full time jobs, even in Australia. Many workers in Australia have been forced to retain, to become self-employed or to take early retirement. Generally, the impact from globalisation is that a life time career with one employer is becoming elusive and the time between jobs is lengthening for the unemployed. Most of families in Australia need two incomes in order for them to meet their necessities. Australia has one of the highest rate of joblessness among families with children and this is a mojor cause of child poverty. Poverty and social welfare costs have been raised by higher unemployment and job insecurity. Government has taken initiative by restricting non –white immigration to prevent the influx of low wage workers and competition for unskilled local labours. Despite of the higher rates of unemployment in Australia, the government has tightened eligibility requirements for unemployment benefits and other forms of social assistance. Through these programs, those who participating in these programs are removed from the official unemployment statisitcs.

Lower Wages Offered

In Australia, fair wages were established through trade union negotiations and were generalised to all similar workers throughout the country. The wages only raise when the government choose to increase them. Unfortunately, the employer groups continually lobby to keep wages low for their profitable purposes. There is a direct correlation between union membership and higher wages. In earlier years, the employees in Australia used to have higher rates of union protection. The fallen in union membership causes it more worst to the employees. The lost in government vulnerable industries and introduce to free trade also encouraged low wages paid to the workers. Solution for poverty due to low wages in Australia can be done if they include more government intervention and spending in economy, education and labour market. This time, considerable political is required to counteract the strong lobby from the politician right who argue for less government intervention. Changes in the relationship of a national economy to the global economy can produce profound changes in the political-economic arrangements of a country. In addition, it affecting the equalibirium wages and employment, such as changes could well be unsettling in themselves (Noel Gatson, vol.15, 2008). For the sake of communities in Australia, it is really need for government intervention to protect the local labour forces.   

Potential Changes in the Global Market on Economies

Businesses are consider the potential entry of international competitiors into the markets. They plan pricing strategies and employment policies based on what could happen if cheap foreign producers entered the market. What is it means that the businesses will consider to set up their operations in countries where profits are expected to be greatest. They will set up their business to the countries that have the low wages, where the union are surpressed and there are low corporate taxe rates. Considering profitability is good for the businesses to grow, but not for the life of employees. This phenomenom would not bring good impact for them especially for lowest skilled workers. Either like it or not, to survive, they have to face it. Thus they need to use these fears to push for labour market and workplace reforms (Ronaldo P. Munck, Vol.1,Issue 2, 2010). This situation happen to Australia as well with the move to individual contracts and the growing casualisation of the workplace. Highly skilled workers maybe benefit from this situation, but the lowest skilled and marginalised workers tend to lose out through poorer working condiitons and less job security. Government needs to plan strategies to help reduce the unemployement rates, reduce the shortage numbers of skilled workers as well as to overcome the problem of low wages in Australia.

Government’s Plans to overcome Shortages of Skilled Workers

Government has taken some of the initiatives to overcome the shortages problem. One of them is the intoduction of The Skilled Category of Australia’s Migration Program. It is being designed to target migrants who have skills or outstanding abilities that will comtribute their abilities to the Australia economy. The aim of this program is to attract overseas personnel to migrate to Australia and help to address the shortages in particular jobs that exist in Australia and enhance the size, skill level and productivitiy of the Australian workforce. Government also provides temporary entry into Autralia. For many individuals, temporary entry seen to be easier and more publicly acceptable way of moving into the global market for skilled workers. The temporary entry visa programs also provides alternative means for skilled workers to obtain permenant residence in Australia (Joo Cheong Tham and Lain Campbell, no.50, 2011). There are many more action taken by Australian’s government to boost the economy and jobs opportunities in Australia.

Conclusion 

Australia has gradually been emerging as a knowledge based economy through technological improvements and changes in market and social conditions. With the rise of globalisation and multinational companies, transfers of staff within these companies have also contributed to the increase in mobility of highly skilled workers. Globalising also create unemployment rates that affect the communities in Australia due to free trade, common market agreements and a new information technologies.  

Globalisation can bring good and bad impacts to the economies and societies in a country and it is no exception even for Australia. The impact of globalisation also bring bad consequences to their labour market when there is no boundaries and limitation in migrants and emmigrants. In the finding shows that globalisation has increased income inequality among the workers (Noel Gaston, vol.15, 2008).

Government intervention could help to reduce the unemployment rates and help to increse the low wages for the workers. Due to high costs of living, it is really need for government to help the workers from poverty. Poverty in Australia has become major problem to the country where the ‘power of buying’ no longer with them because they are only able to fulfill their necessities. It is quite traqic to workers in Australia especially unskilled workers to face this situation due to globalisation that should bring a good luck for them. Thus, economic restructuring and greater labour market flexibility are probably needed in case to raise national income.