People are discussing various issues concerning the Global Labour Market, but is there really such thing? Is it even desirable or just another way to increase the wealth gap, between the rich and the poor?
This blog deals with the topic ‘Global Labour Market’. In order to understand the topic thoroughly it is necessary to simplify the following terminology.
Labour: trading work for capital
Market: a place where buying and selling of goods occurs.
Due to technological developments (e.g. the internet as connecting tool), as well as the aggregation of markets on an international level, geographical barriers became easier to overcome. Hence, one can say that nowadays global competition exists.
When on the one hand, there is more competition, on the other hand, global markets enable close cooperation, increased flexibility, as well as overall liberalisation. This may lead to flexible labour markets, deregulated financial flows and free international trade.
The OECD stated that “rich countries should double their efforts to increase the flexibility of labour markets, too boost competition”.
Hence, the Organisation for Economic Co-operation and Development, which was founded to ad international organisations to tackle challenges (economic as well as social ones), governments are faced with, believes that liberating the labour markets is a way to avoid deflation.
Conversely, the OECD focuses their idea on rich countries, which are already operating in stable environments.
Furthermore, the ILO, International Labour Organization, stated the following within their ‘Economic and Labour Market Analysis’ : “ In a globalized world, where competition has intensified, labour markets work best when there is an institutional environment that allows adjustment flexibility to firms while ensuring income, social and employability protection for workers. “
This implies that especially developing countries need to stabilize first, before liberalization can become an option.
An OECD-economist, namely Klaus Hebbel even stated that “more flexible labour markets may strengthen economies capacities in regards to future downturns to interfere with output and employment”.
Up to this day, it is still argued whether or not a global labour market exists. Besides the OECD, the UNESCO and the European Union encourage the establishment of international marketplaces. The concept is said to be, gathering pace, however more rapid-modernization and liberation are said to be necessary. The great conflict is that unlike developed countries, countries with unstable economic systems (e.g. Mexico) are unable to liberalize their labour markets, because it would destabilize their markets even further. Hence, one could argue that a further-developed globalized labour market increases the gap between rich and poor countries.
Which leads to the question whether or not organizations, such as the UNESCO and the European Union, want to support this? Questions arising are: Is the world ready for a global labour market? Are we already operating on a global market? How can the gap between developed and underdeveloped countries be diminished without sacrificing great business opportunities along the way?