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Chapter 09
LaborForces
McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
Overall Size of the Workforce• 2010 World Population – 6.8 billion
– 48% < 25 years– 31% < 15 years
• 2010 World Population – 6.8 billion– 48% < 25 years– 31% < 15 years
• Developing Nations:– younger, growing populations due to high
birth rate and reduced infant mortality
• Developed Countries:– Population decline due to low birthrate and
low immigration
• Developing Nations:– younger, growing populations due to high
birth rate and reduced infant mortality
• Developed Countries:– Population decline due to low birthrate and
low immigration
9-2
Unemployment
• Global Unemployment – 6.6%– 34 million increase
over 2007 with 2/3 in developed countries
• Global Unemployment – 6.6%– 34 million increase
over 2007 with 2/3 in developed countries
• Projections:– Employment Growth:
• SLOW
– Recovery:• Labor LAGGING behind
economic recovery!• Unemployment Rates –
SLOW reduction
• Projections:– Employment Growth:
• SLOW
– Recovery:• Labor LAGGING behind
economic recovery!• Unemployment Rates –
SLOW reduction
LO1
9-3
Vulnerable Workforce:
• Self-employed or contributing family members– No contracts or formal
work arrangements– Characteristics:
• Inadequate earnings• Low productivity• Difficult work conditions
that undermine fundamental work rights
• Found in all economies but most in developing countries
• Growing worldwide
• Self-employed or contributing family members– No contracts or formal
work arrangements– Characteristics:
• Inadequate earnings• Low productivity• Difficult work conditions
that undermine fundamental work rights
• Found in all economies but most in developing countries
• Growing worldwide
Aging Populations:
• 2010: 7.6% was 65 + years old, getting older in developed countries
• Projected to grow by 8.4% in 2015 and 16.4% by 2050
• 2010: 7.6% was 65 + years old, getting older in developed countries
• Projected to grow by 8.4% in 2015 and 16.4% by 2050
LO1
9-4
Urbanization of Workforce
• Global Shifts from Rural to Urban:– 1950: < 25% lived in
urban areas– 2010: 50% urban– 2030: 60% urban– Developing countries:
4x faster than developed countries
• Global Shifts from Rural to Urban:– 1950: < 25% lived in
urban areas– 2010: 50% urban– 2030: 60% urban– Developing countries:
4x faster than developed countries
• Impacts:• Shift from agriculture to
industry or service sectors• Growing low-cost, low-skill
labor pool• Large % classified as
“vulnerable workforce”• Quick to learn industrial
skills• Social & psychological
problems with adjusting to industry & service sectors
• Impacts:• Shift from agriculture to
industry or service sectors• Growing low-cost, low-skill
labor pool• Large % classified as
“vulnerable workforce”• Quick to learn industrial
skills• Social & psychological
problems with adjusting to industry & service sectors
LO1
9-5
Immigrant Labor• Facts:
– 1850-1970: 60 million Europeans left for overseas work
– By end of WWII: 30 million S. Europeans & N. Africans went to 8 European countries
– 2005: 191 million living out of birth country
– 2008 - U.S.: 5% of world population and 20% of world’s immigrants
• Facts:– 1850-1970: 60 million
Europeans left for overseas work
– By end of WWII: 30 million S. Europeans & N. Africans went to 8 European countries
– 2005: 191 million living out of birth country
– 2008 - U.S.: 5% of world population and 20% of world’s immigrants
• Reasons:– Seeking better economic
conditions– Global labor supply &
demand– Less strict regulations
• Migrant Labor Skills:– Highly Skilled: Medicine, IT– Low Skill: Ag, domestic
service, 3-D” jobs – “dirty, dangerous & degrading”
• Reasons:– Seeking better economic
conditions– Global labor supply &
demand– Less strict regulations
• Migrant Labor Skills:– Highly Skilled: Medicine, IT– Low Skill: Ag, domestic
service, 3-D” jobs – “dirty, dangerous & degrading”
LO1
9-6
Child Labor• Facts:
– UNICEF: “158 million, 5-14 year olds work in conditions that fail to meet basic needs in exploitative, hazardous or
illegal conditions”
– Child Labor exists in all countries but mostly in developing countries
– 7% of child labor is in agriculture
• Facts:– UNICEF: “158 million, 5-14
year olds work in conditions that fail to meet basic needs in exploitative, hazardous or
illegal conditions”
– Child Labor exists in all countries but mostly in developing countries
– 7% of child labor is in agriculture
• UNICEF’s Convention on Rights of the Child (CRC):1. Nondiscrimination2. Devotion to the best
interests of the child3. Right to life, survival &
development4. Respect for views of the
child
• UNICEF’s Convention on Rights of the Child (CRC):1. Nondiscrimination2. Devotion to the best
interests of the child3. Right to life, survival &
development4. Respect for views of the
child
LO1
9-7
Forced Labor• 12.3 million women,
children & low-income men affected
• 59% are women and girls forced in: servitude, domestic work, sweatshops, prostitution– South & East Asia– North & West Africa– Latin America– U.S.
• 12.3 million women, children & low-income men affected
• 59% are women and girls forced in: servitude, domestic work, sweatshops, prostitution– South & East Asia– North & West Africa– Latin America– U.S.
• U.S. State Department’s Trafficking in Persons Report includes: – Bonded labor– Involuntary servitude– Debt bondage– Involuntary domestic
servitude– Forced child labor– Child soldiers– Sex trafficking, prostitution,– Children exploited for sex,
and child sex tourism– Prison labor is “forced
labor”– Descent-based slavery
• U.S. State Department’s Trafficking in Persons Report includes: – Bonded labor– Involuntary servitude– Debt bondage– Involuntary domestic
servitude– Forced child labor– Child soldiers– Sex trafficking, prostitution,– Children exploited for sex,
and child sex tourism– Prison labor is “forced
labor”– Descent-based slavery
LO1
9-8
Brain Drain• Brain Drain:
– A country’s loss of its most intelligent and best-educated people
– Record numbers of scientists, IT pros, engineers, teachers & health care professionals move to OECD countries, NOT just the U.S.
– Reasons – Better:• Salary• Standard of living• Research• Social environment
• Brain Drain:– A country’s loss of its
most intelligent and best-educated people
– Record numbers of scientists, IT pros, engineers, teachers & health care professionals move to OECD countries, NOT just the U.S.
– Reasons – Better:• Salary• Standard of living• Research• Social environment
• Reverse Brain Drain:– Highly skilled immigrants
returning home after contributions to host country because of U.S. outsourcing of knowledge work in engineering, software, product design and development to
• India• China• Russia
• Reverse Brain Drain:– Highly skilled immigrants
returning home after contributions to host country because of U.S. outsourcing of knowledge work in engineering, software, product design and development to
• India• China• Russia
LO1
9-9
Guest Workers
• People who legally go to foreign countries to perform certain types of jobs in:– Service work– Factory work– Construction
• People who legally go to foreign countries to perform certain types of jobs in:– Service work– Factory work– Construction
• Why?– Countries with low birth
rates & labor shortages need labor – France, Germany, Switzerland & Scandinavia
• Issues:– Good in growing
economy– Bad in slow economic
growth with excess labor and governments don’t reissue labor permits
• Why?– Countries with low birth
rates & labor shortages need labor – France, Germany, Switzerland & Scandinavia
• Issues:– Good in growing
economy– Bad in slow economic
growth with excess labor and governments don’t reissue labor permits
LO1
9-10
Sexism• Patriarchal values
inherent in many cultures deny women equal participation in society:– Saudi Arabia, Middle
Eastern country laws & traditions prevent mix-gendered workplaces
• Patriarchal values inherent in many cultures deny women equal participation in society:– Saudi Arabia, Middle
Eastern country laws & traditions prevent mix-gendered workplaces
• Facts:– Women hold <25% of
senior management positions worldwide
– 1/3 of private companies have no women in senior management
– Women’s education is increasing, illiteracy declining with their economic impact growing
• Facts:– Women hold <25% of
senior management positions worldwide
– 1/3 of private companies have no women in senior management
– Women’s education is increasing, illiteracy declining with their economic impact growing
LO2
9-11
Racism• Racism:
– Racial conflict & discrimination is world-wide
• Globalization:– Increases contact between very
different people– May eventually minimize racism by
valuing differences– May cause growing racism!
• Racism:– Racial conflict & discrimination is world-
wide
• Globalization:– Increases contact between very
different people– May eventually minimize racism by
valuing differences– May cause growing racism!
LO2
9-12
Minorities in Traditional Societies• Traditional
Societies present HR Problems & Opportunities:– Merchants, bankers &
business people scored in some societies
– Outsiders may dominate local commerce
• Traditional Societies present HR Problems & Opportunities:– Merchants, bankers &
business people scored in some societies
– Outsiders may dominate local commerce
• Advantages to Foreign Employers:– Skilled minorities
immediately available– Speak local language +
others– Less nationalistic than
locals
• Disadvantages:– Unpopular with locals– High dependence on
minority employees– Discrimination against
minorities may result
• Advantages to Foreign Employers:– Skilled minorities
immediately available– Speak local language +
others– Less nationalistic than
locals
• Disadvantages:– Unpopular with locals– High dependence on
minority employees– Discrimination against
minorities may result
LO2
9-13
Labor in Developing Nations
• Challenges:– Poverty:
• Low educational levels affect quality of labor force
– HIV/AIDS:• Creates social unrest and labor shortages with “up-
skilling” a major challenge
– Outsourcing:• Developed Country: Outbound job transfers seen as
problem• Developing Country: Economic growth seen as benefit of
globalization
• Challenges:– Poverty:
• Low educational levels affect quality of labor force
– HIV/AIDS:• Creates social unrest and labor shortages with “up-
skilling” a major challenge
– Outsourcing:• Developed Country: Outbound job transfers seen as
problem• Developing Country: Economic growth seen as benefit of
globalization
LO2
9-14
Labor Unions: Europe, U.S., & Japan• Labor Unions are “Organizations of workers”
– Serve different country purposes– Influence employee matters differently– European labor unions are socialist or democratic party affiliated– “Worker identity” is common
• Labor Unions are “Organizations of workers”– Serve different country purposes– Influence employee matters differently– European labor unions are socialist or democratic party affiliated– “Worker identity” is common
• U.S.:– “Collective Bargaining” used to negotiate with management– Adversarial with management
• Europe: – Governments set wage & working conditions– Adversarial with management
• Japan:– Strong identification with company interests
• U.S.:– “Collective Bargaining” used to negotiate with management– Adversarial with management
• Europe: – Governments set wage & working conditions– Adversarial with management
• Japan:– Strong identification with company interests
LO3
9-15
Multinational Labor Activities• Companies escape
unionization by outsourcing and production transfer to other countries
• Companies escape unionization by outsourcing and production transfer to other countries
• Unions’ response:– Collect and disseminate
company’s information– Consult with unions in
other countries– Coordinate policies and
tactics with those unions
– Encourage international company codes of conduct
• Unions’ response:– Collect and disseminate
company’s information– Consult with unions in
other countries– Coordinate policies and
tactics with those unions
– Encourage international company codes of conduct
LO3
9-16
