Table of Contents
Creation of Employment
Forces of Demand and Supply
Effect on Firms
Unemployment is one of top social and economic problems in the majority of the countries whether developing or developed. For those who are employed, the salary and wages issues top the lists in the departments dealing with human resource, labor and human rights. Very few countries will attest that they have not seen workers striking due to salary increment in the past twelve months, especially in the developing countries. Unfortunately, globalization has not made the needed impact to witness a change in the field of labor and remuneration. In fact, there are strategies that have been put in place that have worsened the state of affairs. Strategies that include outsourcing, trading tariffs, and laws governing the ‘mother’ companies, amongst others have only worsened the already deteriorating state (Ruth & Kathy, 2005). This paper will discuss wages as an aspect of the global marketing continuum, relating ways in which global marketing has negatively affected the remuneration packages even though it has helped to create employment.
Creation of Employment
It is undisputable that global marketing has provided employment to many people especially those in the developing countries. Although this has brought a partial solution regarding the employment problems in some countries, it increased the remuneration problems in both the developing and the developed countries. Global marketing has brought employment opportunities to both the skilled and the unskilled labor. In fact, the unskilled labor is attracting more companies as it is cheaper and more reliable. Although this looks like a solved problem, this cheaper labor is watering down the skilled labor.
According to Feenstra and Hanson (2001), there is an increased “decline in the wages of less-skilled workers…both in real terms and relative to the wages of more-skilled workers.” There are many factors leading to such circumstances, a major one being the “increased competition form low-wage countries.” As earlier noted, the population in the developing countries is increasingly benefiting from global marketing while the population in the developed countries faces the “wrath” of the same. Outsourcing, although it will be discussed in more details later, has played a major role in the fluctuations and the turn of events taking place in the labor market.
McPhail and Fisher (2008) feel that the employment wages affect the quality of jobs thus affecting the general market. It is significant to understand that wages are a significant motivating factor for an employee. The employment opportunities created may be many, but if the employees feel that they are not being properly compensated, they decrease the quality of work or quit the job altogether. In most cases, they choose the former option since they are in need of the money. Poor job quality leads to poor products, which directly affect the market.
In the last decade or so, the employment levels of the skilled and the unskilled labor in such developed countries as the United States and the European countries have greatly deteriorated as they lose these opportunities to the developing countries (Kusluvan et al. 2010). If not losing the opportunities in general, the wages have decreased as there is always another qualified person who can do it at a lower wage whether the person is from the country or from outside. In other circumstances, the question levels down to the place where the employee is from.
Technology has played a crucial role in the continuum nature of global marketing. As much as new technology is increasing the efficiency of doing business, it is also replacing more and more human labor. Due to such replacement, the remuneration package of the employees doing that job is also negatively affected. In most cases, one has the option of accepting the compensation being offered or rejecting it (Santoshi, 2011). After all, a machine can perform the same task more efficiently and effectively.
Until a couple of decades ago, technology was limited to a few countries, most of which were the developed ones. Businesses opted for manual labor, whether skilled or unskilled. By the turn of the millennium, everything was either computerized, digitized or in some other type of technology that limits the use of manual labor as much as possible (Hennessey, 2011). Additionally, global marketing enabled the easy transfer of these technologies from one country to another and from one market to another. Those able to use these technologies received higher payments in the initial stages then the pay reduced as the use became more popularized.
It is undisputable that the use of IT has increased efficiency at the workplace. It is also evident that this same technology reduces the labor costs for any organization, the main reason why many organizations have embraced it. In most cases, most technologies have to be imported, as they are not available in the local markets (Lee 2010). Most organizations/corporations prefer incurring the capital costs instead of incurring the long term recurring labor costs (Hennessey, 2011). The laborers are therefore left with the options of accepting the wages being offered or staying jobless. Furthermore, presenting salary dispute cases to the concerned unions does not make the needed impact. Organizations always argue that they have the option of using the substitute machines/technologies.
As part of the growing technology, the internet has played a crucial role in the global market penetration. Corporations, organizations and other means of technology have taken advantage of this technology in order to penetrate the emerging markets. People can now purchase and sell goods online. Communications are done online thus saving a lot of back and forth movement (Renard 2008). Although this has increased efficiency, the labor market has been negatively affected. Business managers and owners use the internet in order to know the ongoing issues in the global market. This varies from the stock exchange rate to the remuneration packages of each type of labor. The concentration of labor is cheaper, whether locally or internationally. Since the whole market is buying the same type of labor almost equally, the laborers are left with the options of accepting the wages or advancing their skills.
Forces of Demand and Supply
The forces of demand and supply materially affect the labor market as much as it affects other markets. The more the supply of labor, the cheaper it becomes (Ruth & Kathy, 2005). In other cases, the availability also affects this market in that the availability of a substitute reduces the compensation package of the particular labor.
Inflation, recession and other economic factors have played a key role in the way people are to be remunerated (McPhail & Fischer, 2008). However, there is a significant difference between the remuneration packages of the mid twentieth century and the current packages. Global marketing has enabled some resources and knowledge to reach countries that could have otherwise not been reached in other circumstances.
In other cases, the popularizing or making some types of labor unpopular has been encouraged by the global community. For example, in the early 90’s a person who only knew the basics of a computer was highly marketable in the developing countries and his wages were quite high. However, as more and more computers penetrated the external markets, the need to learn computer skills became more popular (Rory, 2006). Soon, computer skills were as significant as knowing the national language. Today, computer skills are not an added advantage in order to receive good wages, but part of the qualifications for one to receive good wages or to get employment.
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