Table of Contents
Abstract
The term globalization is currently the focal point of intense economic and political controversy. International Labor Office (1995) claims that globalization has been going on since the early 1970s: economies have moved towards international trade liberalization, deregulation and interdependence. Bruno, Falzoni and Helg (2004) indicate that on one hand it has been presented as a source of numerous opportunities. Developed nations like the US therefore have nothing much to lose from foreign direct investment, lower trade barriers and financial capital flow (Leisink 1999, p.29). On the other hand, it is viewed as a great threat to political sovereignty and economic prosperity. In fact diverse coalitions of opponents have emerged due to concerns over globalization.
All said and done, the worker or human labor remains at the center of controversy. Great Britain: Parliament: House of Commons: Treasury Committee (2007, p. 24) indicate that he is either portrayed as potential victim to carry the largest cost of globalization or a special interest who is so much willing and ready to sacrifice the gains of the society for his personal benefits. However, Bailey, Rai and International Labor Organization, Pectoral Activist Programme (2000, p. 20) suggest that the only time that globalization would lead to benefits to the human labor is in the most optimistic circumstances of political discourse or trade theory. Blanpain, R, Tiraboschi and Ortiz (2008, p. 165) are of the idea that the best way to understand the effect of globalization on the labor market would be to assess the number of jobs gained or lost together with the downward or upward pressure exerted on the wages by analyzing particular labor markets.
Globalization
The paper explains how globalization affects the labor markets. Mostly how countries economy operates under the rising global changes experienced in the world. Moreover, the paper describes the level of economic rise and how it impacts to investment by third world countries and the rest of the world. Lastly it explains how globalization impact on labor markets affects people's lifestyle. In the same paper discussion of how globalization is offering huge potential profits to the companies and countries though complicated in their widely differing expectations, values and cultures, living standards and legal systems and impromptu global effect-and cause linkages.
Globalization is described as the process whereby economies of different countries around the globe increasingly became integrated over a period of time. There is connectivity and the interdependence of worlds markets with businesses. It has speeded up in a dramatic way and in the last three decades it has been very technological in advancing making traveling of people easier, improvement on international business and development on networking and communication sector. These recent forces drive the advances in telecommunications and infrastructure generally as economies being connected with other economies. By these there is increase in competition making globalization to become more and more common figure on the world economy, and also anti-globalization and pro-globalization lobbies rising (Bruno, Falzoni & Helg, 2004, 23-5).
In these the pro-globalization always lobby arguing that, globalization bring about much of the increased opportunities for everyone thus increasing the competition as good thing for it makes the agents production to be more efficient. World economic forum and world trade organization are the two prominent pro-globalization organizations. World trade organization was a pan-governmental entity set up with the purpose of rules formulation that will then govern global trade and the capital flows through member consensus process and supervise member country and ensure rules are adhered to or followed.
On the other hand, the anti-globalization group argues that, certain groups of the people deprived in terms of resources are currently not capable for the functioning within increased pressure that is competitive and is being brought about when countries allow their economies to be more into the rest of the world bonding. The organizations that are important in anti-globalization organizations include, the environmental groups e.g. (Greece peace and Friends of Earth); the international organization for aid such as Oxfam; and the third government organization in the world like G-77; also business organizations that compete globalization with other trade unions which threaten it like the U.S. the European and Textile farm lobby and Australian with U.S movements of trade union.
According to economist and financial analysts in Oxford University, labor markets are defined as the nominal market whereby workers find employers and work which earns them salary. Also it is a place where other workers who are willing or volunteer are found with wages being determined in the same market. The labor markets are either national or local even international in scope which comprise smaller, labor markets interaction with other different qualifications with skills and the geographical locations (Bruno, Falzoni & Helg, 2004, 77). Labor markets depend on information exchange between job seekers and the employers about their wage rates, employment conditions, competition level and allocation of jobs.
Globalization on wages and jobs
With globalization taking place, goods, capital and labor, and technology are integrated internationally and it is almost seen everywhere. It has coincided higher unemployment among less skilled with income that is widening the income inequality. With global integration there is sharing of exports and imports in overall output providing ready measure that extends the globalization of goods and markets. Although there are plenty of foreign goods in every country more than ever before, integration of product market and expansion has never been continuous over a long period. For the economies that are advanced during the important decade for globalization since WW II was in 1970's, when ratio of the trade to output markedly rose in both the advances and developing countries' economies in wake of two oil shocks. Developing countries exposure to the international trade suddenly picked again in late 1980's, coinciding with trade liberalization movement.
The ratio rise of exports to the total output is likely understates globalization degree in product market. The advanced economy output consists of the largely services in non-tradable: education, insurance, finance, real estate and the retail and wholesale trade. Perhaps, it could be accurate in measuring of importance of the international trade through considering merchandise with exports as production share of the tradable goods only. The alternative measure shows much larger role in the trade. Nevertheless, the globalization measured is occurring and gives no signs in slowing down.
The development of labor markets is an important trend in the markets and it advances the economies which is steady shift in the demand away from less skilled towards the more skilled. However, the skills are usually defined in terms of education, job experience and the classification. The effect has a trend which produced very dramatic rises in income and wages inequality between more and less skilled in some of the countries, also the unemployment among the less skilled people in other nations (Leisink, 1999, 58). A good example is U.S whereby workers who are less skilled wages have steeply fallen relative to the more skilled. In the other countries it impacted to the demand shifting to unemployment instead of the income. Some of the countries having smaller wage increase inequality have been suffering rather than being higher in rates of the unemployment across the countries with less skilled workers.
Globalization explains differences in the outcome for the wages with employment between countries differences in the labor market and structures. Countries with wages that are flexible and set in decentralized labor markets, such as U.K and U.S. the relative decline on demand for less skilled in the labor market led to it being translated into lower and relative workers wages. The other role played by globalization on the labor markets is the introduction of trends shedding light on trade impact. At all industrial classification levels on the U.S manufacturing sector in 1980's employed are relatively high skilled workers than those in 1970's even though wages of the workers had risen. The finding is the income gaps having widened in number of the developing nations and also the advanced economies, evidence enough, it suggest that in labor market the developing countries demand on shifting towards the workers with high skilled workers and relative in average. The research also reveals that, the trade liberalization in Mexico in mid to the late 1980's which led to the increase in relative wages of the high skilled workers unlike in developing countries whereby the opposite has happened.
Also import competition is one of effects of wages. Not surprisingly, most of the people link the increasing globalization to decline in relative wages of the less-skilled workers in advanced economies (Leisink, 1999, 143-4). But with the increased international trade, more so in the developing countries, have worsened in inequality in income earning. Through the economic theories brought forward on international trade, the trade is said to affect prices of products in both the importing and exporting countries thus affecting labor price. That is, wages in the same countries are being influenced by labor demands. The product prices that are being brought forward by competition from imports then alter profit opportunities that face firms. Then the firms respond through shifting of the resources in industries in profitability rising away from the ones that have fallen. The trade then flow giving rise to shifts in demand for labor as more of the workers required in newly profitable sectors and very few unprofitable sectors (Leisink, 1999, 150). When labor supply is fixed, the demands change and it leads to rise of wages in that workers will most definitely demand for premium in switching into more industries that are profitable.
A big deal of the study has been done in the question though conclusions aren't robust; it appears to be little in evidence of the larger price that increases in the skilled and labor intensive produce and products in the intensive industries. The rapid technology or globalization has changed and it seems to have been leading to relative prices and declines in the most skilled intensive industrial rather than decrease in the prices in the industries with unskilled labor intensive whereby one would expect in faces of import and competition from the countries that are still developing. In most cases, the trade with developing countries has been played in a small role if any raising income inequality in economies that are advanced (Bruno, Falzoni & Helg, 2004, 83-5).
Globalization effects on industries that are major have demanded for expansion thus leading to the faster inflations which are justified the economic conditions that are current. It is not only considered as a slack in the labor market but also institutional changes introduced since the past decades beginning and markets global integration making it more difficult for wage price spiral to also emerge. When the bargaining power reduced in unions and increased the competition in labor market, there is a wary in the prices they incur in the market. Also there is greater realization that the global competition environment increased jobs for workers depending on profitability of the companies having been of major factors in the establishment of very closer link between the compensation and productivity. The labor cost growth unit had a clear tendency in 1990's major industrial countries to fall with the rise in margins. The rates in inflation continued falling in Western Europe and the United States thought the same year.
Globalization on labor markets has a major impact on industrialization and urbanization mostly on developing countries. Economically due to globalization, environment is being distorted therefore leading to extraction, production and consumption of natural resources and generation of waste. Due to increase in demand of energy such as charcoal and burning of woods, natural gas are being emitted to the environment hence becoming a an epidemic to the globe. There are several organizations which have lead to the organization of the world markets such as world trade organization [WTO] which was established in 1995 to facilitate world trade and solve disputes among the nations. Its' headquarter is located in Geneva, Switzerland and it consist of 134 members.
There are three major factors that lead to the intensity of the environment namely: the size of the population, the tendency of productive technology to pollute and the degree of affluence associated with increasing growth of economic activity. Additionally air pollution and waste management plays a major role in the environmental degradation. Through emissions of gasses from the industry and vehicles exhaust can lead to conflict with economic development interest. Gases such as carbon dioxide, sulfur dioxide, nitrogen oxide and carbon monoxide have lead to increasing atmospheric concentration of green house. Additionally river pollution also affects the habitat thus becoming influential to economic problem hence affecting the labor market. There is recognition in the productivity which enhances preservation; rehabilitation and enhancement of the environment therefore supply in the labor market increases (Blanpain, Tiraboschi & Ortiz, 2008, 275). Soil degradation affects vegetation and contamination hence leading to decrease in supply therefore facilitating economic crisis. It will lead to decrease in production of crops hence becoming inadequate to satisfied market demand.
High quality products that meets or exceed customer requirement globally has influence the labor market hence making the economy sufficient. It has also lead to decrease in cost hence increase in demand of the product. High technology and innovation has impacted on time delivery as desired by the customer thus facilitating the production level. Psyche and morale boost motivation hence increasing the efficiency of production, consumption and distribution of goods and services to the market. Global market has enhanced the safety of every aspect of the products and the process thus building up trust to the customers by reducing loses of goods.
Global world has a positive impact on the labor market which influenced the economy. One of the factor which results from global world is easier hiring of the best talent. The best talent helps to come up with the strategies that will help to stabilize the economy of the world. Another factor is increasing employee productivity. When the production level of an employee increases there is also an increase in demand in the labor market (Blanpain, Tiraboschi & Ortiz, 2008, 288). It has also lead to the reduction expenses in manufacturing leads to high demand by the consumers hence increase in supply to the markets. When the expenses at commercial site are being reduced, productivity level increases hence leads to availability of adequate resources. The increase in revenue/market share stabilizes the income and output of resources to the labor markets in the global world. High technology has also lead to reduction of risk thus facilitating easier financing.
There are several changes that global world has brought to the labor markets. These changes are: designation of the resources whereby product planning is extended largely hence making it compatible. Another factor is whereby there is modification of process. This enables both simple and more complex changes from replacing old process with new technology which leads to totally changing of production process. Due to global, waste is being managed and also there are being modified to be reuse by a process known as recycle hence increase availability of resources to the labor market (Blanpain, Tiraboschi & Ortiz, 2008, 320). For the house to be kept well, they must be focused on keeping processes, equipment, workplaces and work force organized, neat and clean has being advanced due to global world. This aspect configures that there is advanced in technology.
There is focused on how the enterprises meet the dynamics needs and expectation of customers due to global world. Social and ecological issues make productivity improvement more efficient thus increased competitiveness, internationalization and sophistication of markets. Global markets has lead to the preservation, rehabilitation and enhancement of the environment hence nature the resources (Blanpain, Tiraboschi & Ortiz, 2008, 241-4). Habitat which provides physical condition under which plants and animal live to survive are being protected nowadays by the global world. They play an important role in terms of food and other products i.e. sources of medicine thus influence labor markets because of availability of resources.
Labor markets are being affected by global world majorly through denying workers interest's especially unskilled workers by mobilizing the capital and trade (Blanpain, Tiraboschi & Ortiz, 2008, 254-9). It is biased since it is interested on wages, employment and income inequality in the advanced economies. Moreover it is categorically since it leads to a winners and losers creating inferiority and superiority among them. Policies makers who govern the global national welfare prefer short term adjustment than nurturing the long term hence influences labor and market reform. It also facilitates education since educational opportunities to enable workers in the advanced economy to advance their skills to fit in the current global world.
Regulation from the external forces affects the price of the commodity such as taxes and penalties which are being driven by the judicial. This is due to the amendments of new laws which are governed by the global world. They serve as a driving force for the move towards the growth production to the market labor. Poverty as a dynamic hindrance to the economic growth has being controlled by increasing the integration through trade and investment. Economy has being improvised interdependently and competition in regards to trading to goods and services hence exchange in capital. Domestic policies and market conditions does not govern economic development due to the global world which authorize their own policies.
An economist and researchers have come up with ideas and strategies that are useful to stabilize the situation of the global world and the labor market (Leisink, 1999, 76-7). It has lead to the tremendous increase in the production of goods and services. It has also improvised market price to the buyers and sellers hence enabling products and commodity to be efficient to the people. Technological improvement plays an important role in the global world by reducing the work task and coordinating the long distance goods making it easier for purchase via internet. It has lead to theories which deals with innovations that enable to govern the market price. When the demand is high there is increase in supply hence making the market price efficient for the consumers due to global impact. It has resulted to easier consumption, distribution and production hence making the world market efficient for the users. Economic growth has significantly increased compared to the recent years due to high technology and innovation of the current world (Bruno, Falzoni & Helg, 2004, 237-9).
Globalization in simple terms means a process where governments, companies and people of different nations interact and integrate. Globalization is mainly driven by investment and international trade with the aid of information technology. This process has greatly influenced the labor market. It is changing the interacting of the nations. Through globalization there has been expansion in the flow of capital and goods and integration of national economies. According to models of standard theory, when a barrier of trade falls or the cost of transport, it stimulates trade increase between consumers of one country and producers of another. Globalization greatly entails fin goods of international trading the countries each stage of production being located where minimum cost is incurred and transmitting ideas of products that are new means of production globally (Bruno, Falzoni & Helg, 2004, 300). In this research, focuses are on how globalizations new aspect affects structure of industry, location of industry and labor market in regional and national economies
When firms from the U.S internationally fragment production, they keep activities that are more skill intensive at home, and transfer abroad activities that are less skill -intensive. This in return may alter the unskilled labor and skilled labor demand and also change the wage structure abroad and home (Leisink, 1999, 178-9). To add on that in the event o outsourcing between bordering countries, such as Mexico and the U.S, or china and Hong Kong, the production globalized increases the production incentive of regions incurring low cost foreign market access. This therefore may change the country's location of its economic activities. Globalization has partly attracted the academic attention since it corresponds with the wage structures dramatic change in developed countries. Since 1970s there has been a steady increase of the real wages of the workers who are more skilled, and a fall or stagnation of the workers who are less skilled.
Inequality in increasing wage is attributed to increased trade with countries experiencing low wage. When profound shocks are experienced at similar occasions, it complicates the identifications of trade impact on wages for example; increasing demand for labor that is skilled, to some extent is attributed to information technology thus allowing eliminating of less skilled jobs (Great Britain: Parliament: House of Commons: Treasury Committee 2007). Changes in technology, is assumed to be the cause of increased gap in skilled wage due to unclear evidence that links wages and trade. When international trade is characterized by foreign outsourcing, an empirical framework is necessary for the estimation of technology and trade shocks on wages and labor demands at identical periods, since, shifting abroad production activities that are less skilled makes home production to be more skilled and intensive. Since 1970, a good percentage of world trade growth, takes after foreign outsourcing and intermediate inputs.
The impact of technological change is also part of contemporary globalization procedure which is associated with information and communication revolution that often suggests that labor market problems are caused by it. The paper argues mostly on how globalization in the world link trade and employment which cannot be examined independently of either overall conditions in demand or working global financial market. Under conditions of rapid capital accumulation of both trade and technology it can be reinforced to a virtuous circle of the economic growth and job creation with productivity increase. On other hand, if the capital accumulation is sluggish and has weak growth, it increases the trade and technical progress which sum up to unemployment or even worsen on inequality in income (Bruno, Falzoni, & Helg, 2004, 302).
The impact of globalization on community was negative due to some aspect such as flexibility and inability to regulate the prices was experienced. This resulted to inequality since one group is benefitting while the other were excluded. It has also lead to the powerful reaction at the local level since they related on the peoples' everyday life. When there is high demand of the product from the people, majorly the prices is likely to increase due to the concern of the people behavior. Fluctuation of commodity prices is mainly affected by the current global world. When there is high demand of products from one nation to the other they are likely to be a gross income. This is whereby there is variation of prices from one nation to the other thus having an impact on nations which have poor economic growth.
Since the pressure of wage was transmitted directly, via the costs in unit labor, on inflation rate instead of employment, the involved parties in the negotiations cannot and should not accept having the main responsibility for maintenance of high employment level while the monetary policies are responsible only for stability. Consequently, a wage policy seeks to bring development in the nominal wages in line to growth in productivity while explicit reference to central bank's inflation targets. If the nominal wages rose in the same rate as productivity with the target rate in inflation, it increases in the productivity then it is translated into the real income demanding for the minimum friction possible. Then the task in the creation of additional jobs became policy makers responsibility in particular fiscal policy and monetary. This is precisely the assignment of economic policy that was successfully pursued early 90's in U.S.
Developing countries have hardly striven at very considerable cost in integrating closely to the world economy. For, many of these countries had history on more inward -oriented strategies in development unlike expectations considered accelerating in their growth in economy that was diminishing vulnerably to shocks externally and equitability of income distribution. According to the comparative advantage, trade liberalization ensured that there was best way in allocation of resources. It also secured exports and revenues required in importation of key ingredients of faster growth. The liberalization of finance would be a centre of attraction to the foreign capital that seeks to return which in turn allows developing countries to be investing more than they could save without running into constrains in payment as well as upbringing of technological and organizational skills through the increased in direct investment of foreign flows.
A faster pace of the investment capital in labor markets is unlikely occurring with no substantial improvement in the business expectations that concerns future sales and key determinants of costs and investment return. Both sets of expectations require or needs macroeconomics policies that are vital. For one thing, the effective demand level determines the total sales and the profits acquired. For another, monetary policy can also affect macroeconomics degree and the volatility with instability thus influencing risks on certainties that are associated with decisions in investment. Without the policies which are designed bringing about faster expansion of demanding greater stability in economically, there is little hope in finding solution to unemployment problem.
In earn 1990's, only U.S federal reserve amongst central banks leading to the industrial economies willing to systematically test in limits of expansionary policies in compatible stable inflation. The results of strong performance of the investment in U.S in the recent years particularly in high-technology sectors, it has generated rapid increase in the productivity, prevention of the re-emergence and inflationary pressures despite high rates in growth with unemployment. The evidence that shows direct link in from either trade or the technology to the rising unemployment of increasing wages and gaps in north is not that convincing. Instead, macroeconomic conditions are particularly relating to the investment remain decisive influence on the labor market in performance.
Trading amongst poor countries that have technological changes which has been very ubiquitous features of post-war economic landscape and the advanced industrial economy. There is a little evidence suggesting that it has becoming pervasive and influences the in performances of economic over past 25 years. At least the scale which could explain dramatic changes employment levels and the wages inequality during the period in particularly the sector of manufacturing. The flaw in fundamental in both trade and technology basing on explanations of the rising unemployment and inequality in North is their assumption of having adequate level of aggregate demand. In fact, for all the technological change being embodied in the human and physical capital and for the leading economies and industrial facing the pressure from NIEs that invest in new kind of capacity or the other . The other impact of technological change was trading independently of macroeconomic determinants of the accumulation in capital being unhelpful.
Since 1973, industrialized countries economies have suffered from fundamental imbalance between the investment and fixed capital in productivity growth and labor supply growth. Much of rise unemployment in structural unemployment is mostly related to slowing down in the investment that in turn is closely linked with the restrictive macroeconomics policies and deregulation of financial markets. The empirical evidence leaves no doubt of positive correlation between investment and the employment. It means that companies tend to invest on capital and labor at the same time instead of investing on one or the other. When things are doing fine they invest and quickly chuck of when they worsen.
Globalization also affected the labor markets in the form of technological improvement thus unemployment for the unskilled. It is an alternative explanation for why there is rise in unemployment and inequality in wages that lies in the development and the diffusion of new technologies. The explanation appeals for a number of levels, not least in shifting any suspicion from trade. To be specific, the idea of new technologies have been accelerating the sectored pace changes in employment from the manufacturers to the services, as well it shifted from unskilled to the skilled labor sectors. It appears to be offering direct link with structural contemporary problems in labor markets. The bias in contemporary and technologies towards more intensive knowledge use input is always seen to be favoring skilled workers simultaneously rising of their relative productivity to that of unskilled (Bailey, Rai, 2000, 142-6). On this effect it has led to unemployment of low skilled and countries where wages are strictly and widen differences in wages in the nations with flexible wages.
Skilled and biased changes in recent years have been associated with increasing of the economic importance of collection and storing through processing and distributing the information. Not only had the industrial landscape undergoing transformation by the rise of the computer industries and semi conductor as well related services being included e.g. software design. Also the tremendous and productivity improvements in the industries brought about rapid in the fall of price in technologies based information. It was coupled with improvements in speed and accuracy with capacity to the generation of information and management leading to widespread use of computer and integrated circuits with robotics, households and industries. The similar trends in satellite and technology in fiber optics have been advancing while carrying capacity that increased the coverage of the technologies enlarging related services application. Technology and information of goods became one of the most growing world trade components.
The new technologies on the labor market ways has been the most extensively analyzed for the United States, where the differential productivity growth between the intensive-skilled manufacturing and rest of the economies are particularly pronounced and the fall in price of skill-intensive goods that are relative to the other goods relative to the other goods is seen as significant (Leisink, 1999, 476-7). The trends then coincided with relative fast rate in high-tech investing in industries and electronics , chemicals and machinery where it correspondingly, the highly educated workers who have skills in solving problems are on demand and they appear to greatest. There is evidence that computer use and research in development intensity of the jobs are mostly linked positively with higher wages. It seems that likely relative wage of skilled labor was increased further by slowing the expansion of number of college graduates in 1980s.
Various pieces of evidence are taken as confirmation of biased skilled technology explanation of the wage growing inequality in North in 1980 and also in 1990s. Nevertheless, studies in firm and industry level, when pointing labor saving it bias in the new production and techniques not finding great impact on new technology on creation of either job or destruction of the same suggesting that the production improvements, alongside the price and reduction on production improvement having generated through compensation of income growth and employment. Moreover, shifting from the partial evidence in a more general explanation of the labor market problems is not that simple. While in U.S the growth in the intensive skill has contributed to productivity enlargement by the industries which never accelerated in relative to other industries until when the latter of half of 1980's after the increase in inequality.
The evidence too many suggests that the rising relative wages from the skilled workers was strongly biased towards the professional business and services with legal services that wages of more obviously use of technology and professions, such specialists for computer and engineers are actually falling relatively to those of the high school graduates during the first phase of revolution in information technology (Blanpain, Tiraboschi & Ortiz, 2008, 555-8). Additionally, although higher premiums for the educational attainment are always consistent with shift in the demand towards more skilled labor and cannot explain the ratio declining of unemployed and unskilled to the skilled labor in many industries and countries including United States during the other second half of 1980's and the first half in 90's. indeed, if the skilled are biased in technological change and had been operative in force of the labor markets, then the countries where labor markets were less flexible such as western Europe whereby there was a clear and very steady rise in the ratio of the unskilled to skilled unemployment. However, it doesn't appear being the case.
Finally, this is the pace that is obvious in technological change that accelerated in a dramatic way for the last 20 years compared to the early 1950,s and 1960s' when the force in labor was shifting steadily towards the unemployed with high skills that historically lower the levels of relative wage on skilled and the unskilled workers that shower no clear trend (Leisink, 1999, 459-5). The decades were marked through as back log of the technologies that were new in the market from the war and there was introduction which profound the impact of globalization such as basic activities as giving rise to industries which are new and transportation in areas as the user durables. It most likely seems that skill process of the upgrading of skill accelerated over past decades at a pace explaining dramatic shifts in the performance of labor market.
Trade and employment are manufactured rising in industrial countries could have been explaining by the manufactured jobs and exports. The exports have risen to above 10 percent in a year in volumes since the year 1970 and are still in small relation to developed countries combined gross domestic product (GDP). When it started in 1990's, the imports and manufacturers from developing countries and member countries in the Organization for Economic Co-operation Development (OECD) which accounts' for one and half of the GDP. On the other hand, the figures in 1999 were three and half. However, the differences notable among major industrialized nations to the extent of penetration and when labor markets have problems that appear to be more acute, we find the trends are increasing the penetration that has been less dramatic and rise is witnessed. Certainly, when there is consideration of manufacturing output, the significance of imports from south appears considerably greater and total imports manufactured effect and mostly in terms of overall wages and structure in size of national economy as GDP measures is what matters in that labor is shifted between the tradable and non-tradable sectors. When labor contents of exports and imports are not having or undergoing significant changes, deterioration of trade balance will certainly be leading to employment decline (Blanpain, Tiraboschi & Ortiz, 2008, 231-2).
A Globalized world has impacted the labor market by creating job opportunities (Leisink, 1999, 467). In the current situation there is an increase of workers in the field of the labor market compared with the previous years. Due to high advanced technology, education and innovation it has lead to expansion of job opportunities thus creating space for more employees to be employed. Developed countries help those countries which are developing by exporting jobs through foreign investments and specialized on outward production. This enables the nations to build up relationship thus boosting the economy of the nation. More workers and investors are being deployed to the labor markets because of increase in the production level.
The government has also come up with the liberation of trade to illuminate domestically produced goods with those goods which are produced abroad. Since goods are being exchange through the means of import and exportation therefore leads to increase in the market trend. Workers are being motivated by increase in their wages when there is increase in the economy and their interest is being put in consideration by their employers. The global world is diminishing the labor jobs due to application of technology i.e. in the operating companies thus multitask and speed of deliverance is achieved compared to manual labor (Blanpain, Tiraboschi & Ortiz, 2008, 557). Moreover it causes retrenchment to the workers since technology in the operating companies is being put into use. The importance is macroeconomics context in understanding the labor markets performance which is clearly demonstrated in recent records of the U.S economy where the unemployment rate fell to lower levels despite the widening of trade deficit with the developing countries and also spread of information with communication technologies.