3.5.1 Employment patterns

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    There are three main reasons for growth in the global labour market:

    Industrialisation – process moves from a primarily agricultural industry to a more             manufacturing sector. Mainly seen in developing and emerging economies e.g.    movement from rural to urban areas in China creating a higher supply of labour.

    Globalisation – workers can take advantage of job opportunities across the world            rather than just in  their home country.

    Increasing level of education and aspirations – education system improves giving           children higher aspirations as a result of their higher ability and awareness of                     opportunities.

     

    The global labour force is estimated to grow to 3.5 billion by 2030. The main contributors to this growth will be developing countries.

     

    STRUCTURAL CHANGE

    Structural change includes the following:

    • Changes in consumer preferences which affect employment preferences.
    • Older industries are closing down, and new ones emerge in their place.
    • Resources are reallocated i.e. Labour moves to new industries.

     

    Urbanisation – more jobs in secondary and tertiary sectors

     

    Urbanisation leads to an increase in the proportion of people living in towns and cities.

     

    Some features of structural change are the following:

    • Growth in the export of manufactured goods from developing to developed countries (due to their lower costs).
    • Deindustrialisation as the manufacturing sector has declined in many developed countries and products are imported instead e.g. from China. Developed mature economies have 70% of workers in the service sectors.
    • Growth of the knowledge economy which drives economic growth and has led to the industrialisation of China and India and a reduction in poverty. Quaternary activity developed – knowledge, ICT and research.
    • Underemployment in developing countries in agricultural sectors especially as demand for these sectors decrease so whilst they are technically employed, they don’t have enough work to sustain them.

     

    INTERDEPENDENCE OF LABOUR MARKETS

     

    Interdependence – when what happens in one part of the global economy affects another

     

    The global labour market has become increasingly interdependent as events in each individual labour market effect the global market. Globalisation can cause structural change, offshoring of unskilled work boosts employment in developing countries and reduces demand for unskilled workers in developed countries. Developed countries can use their physical and human capital to focus on the knowledge economy (high technology and high added value products. Rising incomes in developed countries means that demand for these products have increased.

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