Through the globalization the labour market is often no longer national or regional limited, but global. The result is that the labour supply is increasing enormously. The cost of living in Asia is often only 20% of the cost of living in Western Europe. Accordingly great is the difference in wages and salaries.
In many parts of the world the factor labour is much cheaper than in Western Europe. This means that a German worker is not only in competition with other German workers, but also in competition with many workers from around the world who offer their workforce significantly cheaper. This wage gap between Western Europe and many other parts of the world means that many companies simply relocate production activities to low-wage countries. The only way to avoid the competition with millions of unqualified cheap workers is to be high-qualified.
This can be easily observed at the German labour market: While many entrepreneurs have a need for well-trained workforce, many low-skilled unemployed are on the road. These low-skilled workers can’t offer their workforce at the world market price because they wouldn’t get enough money to afford a German standard of living.
For the future it can be assumed that even higher-skilled jobs are relocated to low-wage countries. This can be seen for example at IT companies, employing programmers in India. Also in China the effort to enhance the skills of workers is high: Every year many more students from China finish their studies with a technical degree than students from Germany.
Source: http://www.globalisierung-infos.de/arbeitsmarkt.html
Posted by NELA11 on May 22, 2011 at 7:18 pm
A lot of pros and cons exist due to Globalisation, but it’s obvious that there are a many negative influences on the labour market. A company, first of all wants to make profit, so the employees have to deal with the consequences of Outsourcing and additionally compete with world’s labour force. For me the biggest problem is and it makes no sense, hat two people can be different paid for the same work! Of course in Asia or India the manufacturing costs are less, but such a huge difference in wages is unbelievable and not economically justifiable or ethical at all. Of course, everybody wants to achieve career goals and have a certain living standard, but no one can expect a whole nation being high-educated and always competing with the outcomes of the Globalisation.