strategy

Increasing international labour mobility

Synonyms:
Coordinating global services
Integrating global labour capabilities
Internationalizing labour market
Globalizing employment opportunities
Internationalizing employment arena
Description:
Creating a global network of employable exchanges in order to enable a more mobile global workforce, equitable balancing of compensation, and expansion of vocational opportunities.
Context:
In 1993, it was estimated that only 1.5% of the workforce is currently employed in countries outside those of their citizenship. Several issues deserve attention in connection with the implications of the growing degree of transnationalization in general and the emerging tendency towards integrated international production in particular for world labour markets. The first is the question of the dispersion of global production systems. The second is the tendency for the patterns of integration to produce a greater specialization of dispersed labour markets. The third is the question of what these tendencies may mean for the autonomy of national labour markets and the influence of cross-border integration on their structures.

Foreign direct investment is not evenly distributed across countries, although its pattern does tend to be more dispersed than that of international trade per se. Access to final markets is an important factor in determining the locational pattern of FDI. The new integrated strategies, however, involve a greater separation of production from consumption and, in so doing, they imply a greater geographical dispersion in the global production system than if the latter were governed by market-seeking foreign investment or arm's-length international trade alone.

Greater labour market specialization also seems to be occurring to the extent that integrated affiliates participate in only some of the activities in the firm's global value chain, and to the extent that the strategic assets now sought by integrated producers have a greater human-capital component, [ie] are created assets. Both of these factors have a potentially significant influence on patterns of locational advantage within a firm and its network of affiliated and non-affiliated units, as well as across countries. Since human-capital-based advantages are not merely sought by major firms, but are also partly transferred by them in the form of organizational and managerial innovations, it is at least plausible that internationally integrated production could accentuate patterns of employment segmentation within national labour markets while contributing to a cross-border convergence of wages and other conditions in some occupations or industries. The emerging pattern of integrated international production may indeed be accentuating disparities between certain core activities and jobs that are dispersed throughout a firm's international production system, and - particularly with the rise of vertical inter-firm production linkages - a growing periphery of jobs, many of which are less stable and less highly remunerated than those at the core.

Finally, the autonomy of national labour-market regulations or welfare systems may be eroded to some extent by the process of cross-border corporate integration through FDI. The point is that TNCs have greater leeway nowadays to locate their activities in those locations with the right mix of quality and costs. For the integrated international producer, geographically distant labour markets compete directly for the same jobs. A vehicle manufacturer wishing to structure its network of affiliates may want to replace the capital equipment in one of its affiliates, maximize the weekly operating time and perhaps add a third daily production shift. In choosing among different affiliates in different countries, the firm may discover that regulations on operating time vary substantially across these settings. Which of the countries will prove most accommodating in adjusting to the proposed changes in the organization of work and production, which of the three countries' labour-market regimes will prove the most flexible ? Wide disparities may exist in this respect between labour market conditions among countries Even among developed countries, there are considerable differences between social welfare and security systems affecting labour Not surprisingly, differences between developed and developing countries are significantly greater Local labour-market policies and regulations may influence positively or negatively the attractiveness or "advantage" of a particular location.

The declining autonomy of national social and labour policies should be considered in the broader context of globalization. Overall, national institutions have become more open to the influence of international economic trends. For example the concern expressed by some people with respect to the [North American Free Trade Agreement] is not only that the agreement may result in a loss of jobs in the United States, but also that the inclusion of a low-wage, unorganized workforce of rising quality within the North American market could apply further downward pressure on United States working conditions and living standards. Similar concerns apply in western Europe relative to central and eastern Europe. The declining effectiveness of strikes or industrial disputes in the United States has also been related by some observers to the greater internationalization of the economy.

Given the disparities that exist between labour-market conditions as well as local policies and regulations relating to labour, the question is whether integrated international production with its increased scope for locational choice might result in a further downward adjustment of social and labour standards as local policy environments compete for a share of international production The policy issue that is raised by this process is whether social policy regulation at the international level could and should minimize such social policy competition and its attendant social costs.

Implementation:
Recent regional initiatives, such as those within the European Union, the [European Economic Area] and the [North American Free Trade Area], have eased restrictions on the mobility of labour, especially business people and professionals. Also, the [Uruguay Round] provides incipient rules for the negotiation of the progressive liberalization of the temporary movement of persons supplying services.

Tactics to increase mobility have included: coordinating global placement; balancing labour systems; building occupational thrust; designing assignment basis; and increasing employment opportunities.

When President Marcos issued Presidential Decree (PD) 442, also known as the Labor Code of the Philippines in 1974, it also created government agencies solely tasked in deploying Filipinos abroad. The Overseas Employment Development Board and the National Seaman's Board were then established under the Ministry of Labor and Employment. In 1982, the government streamlined the bureaucracy on its labor export program by virtue of Executive Order 797. After merging the Overseas Employment Development Board, the National Seaman's Board, and the programs of the Bureau of Employment Services into a single structure, the Philippine Overseas Employment Administration (POEA) was established. The Overseas Workers Welfare Administration (OWWA), was established in 1986. Remittances from overseas workers mainly come from the United States (US $472.3 million), followed by Saudi Arabia ($98.8 million) and Hong Kong ($12.7 million). Not included in these figures are remittances coursed through informal channels.

Claim:
Slower economic growth and the recession in the developed countries have led or will lead to the tightening of immigration laws, which could put a halt to these possibilities and hamper the internationalization of labour markets.
Subjects:
Human resources
Employment
Work
Services
Coordination
Planetary initiatives
Type Classification:
C: Cross-sectoral strategies