Impact of globalization on jobs in Australia

By Evans Jan 22 2021

Economists and other experts have been praising the impact of globalization on international trade for decades. On the contrary, these economists have been failing to pay attention to the adverse effects of globalization (Stiglitz, 2017). There have been questions concerning the impact of globalization on world economies. One issue that has been raising questions concerns about the globalization is the subject of job losses. According to Matthew Klein (2016), the United States lost almost 2 million reasonable paying jobs to the forces of globalization. Additionally, the study findings by ANU Center for Social Research and Methods indicated that Australian workers worry about the loss of their jobs in the future because of globalization (Biddle, Sheppard and Gray, 2018). The presence of different nationalities in the workplaces because of globalization is not a new phenomenon. The outcome is the fear of job losses in the country, the competition of local jobs from immigrants, and the threat to the local industry. As such, there is the need to examine and provide solutions to the negative economic impact of globalization, as the phenomenon is resulting in job losses in Australia and other global nations.

The positive impact of globalization on the Australian Economy

Globalization has had a positive impact on the Australian economy. The nation has been recording improved performances because of the expertise brought in by immigrant workers. The nation’s immigration policy has been allowing a section of international workers to enter and work in the country. As a result, the government has been benefiting from the new expertise of these employees. Although Australian education ensures that there is churning out of professionals annually, the experience brought in by the international workers has been crucial to the growth of the economy. This new expertise by immigrant workers remains the most significant benefit of globalization to Australia.

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The negative impact of globalization: job loss in Australia

However, globalization has been the causal factor of fear of job losses in Australia. Nicholas, Sheppard and Gray (2018) concluded that a majority of Australians fear about the security of their jobs. The authors concluded in line with the finding of the research conducted by the ANU Center for Social Research and Methods. The participants of the study responded they have concerns on the subject of the influx of immigrant workers to the nation (Birrell, Healy and Kinnaird, 2016). The response by the participants also indicated that issues such as the replacement of the human population using robots were not a top priority among current Australian workers.

The primary issue that accompanies globalization is low wages. Australian workers have been grappling with low wages brought by competition by immigrant workers. Wages respond to the supply and demand dynamics of the markets (Monras, 2018). That is, the higher the supply of labour in the market, the lower the fees. The influx of international workers in Australia has been contributing to employees who pay less because of oversupply. Foreign workers are willing to work with lower payments, with this situation pushing the wage rate much lower. Australian workers believe that this phenomenon is presenting a risk to their well-being and their jobs. Typically, employers would be willing to let go of human resources who do not agree to work with lower wages. For this reason, Australian workers judge globalization as a risk to their jobs.

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Moreover, globalization has been instrumental in allowing free movement of cheaper products to Australia in the process of threatening local industries. The most significant issue that accompanies cheap imports to Australia includes loss of taxes and employment. Cheap imports mean that consumers will concentrate on sampling international products to local Australian goods. Consequently, more industries in the country are grounding their operations (Molintas, 2016). The impact of this issue is the lay-off of workers. Australian workers face the risk of losing their jobs with the flow of cheap imports. As globalization continues to take effect, there is the risk of more industries closing down.

The above problems have been raising tension in the labour market. Local workers are now demanding more representation through unions. Furthermore, there has been an increase in the cases of conflicts between domestic and international workers because of mistrusts. The situation is likely to escalate, especially with the rise in the flow of foreign workers to Australia. For these reasons, there is a need for Australia to come up with the solution to handling the subject of job losses arising from globalization.

The Solution to Job Loss because of Globalization

Several solutions arise when the subject of loss of jobs because of globalization appears. The answers to these problems differ.

The first solution to the problem of loss of jobs because of globalization is the creation of more jobs. Birrell and Healy (2016) noted that production of more posts would help address the problem of loss of employment without the nature of additional issues. Creation of other jobs means that there will be an opportunity for both domestic and international workers to remain at work. Currently, jobs have been replacing internal employees in favour of foreign workers. Employers, because of lack of enough jobs, decide between staying with cheap human resources, while at the same time releasing expensive workers.  Domestic employees face the chop every time business owners think about releasing human resources. Creation of jobs means the government-introducing stimulus to the economy to make the producers thrive (Gali, 2019). In continuation, it means the government is advising the population about job openings in unpopular sectors. Currently, most workers compete for limited jobs in popular industries. In the process, other area remains unexploited. The presence of more employment opportunities would help reduce unnecessary competition and animosity between international and local workers.

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Unemployment because of globalization can also be solved by the protection of local industries. At present, domestic industries have been facing competition from cheap imports. The support of the international exporters by their respective governments means they can afford to sell their products at a more affordable price. Australia government must protect local companies against this competitive advantage of international exporters. Addressing the protection of domestic industries mean, that production will continue. In the process, local workers will remain in employment. Businesses to counter huge production costs have been focusing on international workers to carry out the tasks at a lower wage rate. The move helps in the management of production costs but with the expense of local job losses. Protection of Australian industries would help protect job losses because of cheap imports and the use of international workers to manage production costs.

On the same note, the introduction of the quota system of employment on companies operating in Australia can also help solve the issue of globalization on employment. The quota system comprises the rule concerning the composition of workers in a company (Weske, 2019). The law must provide that Australian workers occupy a considerable percentage, while international employees cover the rest of the job opportunities. This option is instrumental in ensuring that employers do not retrench local workers in favour of cheaper foreign workers. For instance, the quota system should demand that 85 % of the entire workforce must be domestic workers, while the rest remain for international employees. The use of the quota system would compel employers to keep local workers. At present, profits are the primary concern of the organization than the welfare of local human resources.

For this reason, the management has been laying-off expensive Australian workers for cheap international workers. This approach, like the creation of more jobs, helps in the maintenance of the relationship between local and foreign workers. The two sets of workers are likely to respect the existing labour laws.

In continuation, the government should consider allowing international workers to work in jobs, which Australians cannot handle. The state must ban immigrant workers from engaging in activities, which an average Australian can undertake. This move prevents unfair competition on local workers. Globalization has been enabling every calibre of workers to move and work abroad. This suggests that globalization is encouraging competition for limited opportunities. Limiting foreign employees from working in a specific field will present an opportunity for Australian workers to thrive (Chand and Tung, 2019). The same feature must apply to managerial positions. The presence of international workers in top-level positions, mainly of multinationals robs locals of these opportunities. As earlier stated, the government should only allow immigrant workers to work in certain occupations to protect the local human resources.

Although the above solutions have a chance of addressing the problem, the best alternative is the creation of more job opportunities. This solution provides an equal opportunity for domestic and international workers to thrive. The government in this should aim at capitalizing and management of the impact of globalization on the local job market. Some of the actions that will stimulate the creation of more jobs include reduction of interest rates, favourable business environment and offering incentives.

Conclusion

Australia, like the rest of the global nations, continues to face the problem of job loss because of globalization. The phenomenon has been increasing the anxiety among Australian workers, allowing cheaper imports and facilitating the cases of low wage rates. Some of the solutions to the globalization problem include the creation of more jobs, the introduction of the quota system, protection of local industries and allowing immigrants to work in tasks, which Australians cannot handle. The best solution is the creation of more posts by the government. The solution minimizes the risks of disputes between the two sets of workers. Protecting local workers is a crucial step by the Australian government to enable the growth of the Gross Domestic Products and the well-being of its population.

References

Biddle, N., Sheppard, J., and Gray, M. (2018, July 30). Australians worry more about losing jobs overseas than to robots. Retrieved from https://theconversation.com/australians-worry-more-about-losing-jobs-overseas-than-to-robots-100728

Birrell, B., & Healy, E. (2016). Globalization, immigration policy, and youth employment in Australia. In Creating Social Cohesion in an Interdependent World (pp. 263-280). Palgrave Macmillan, New York.

Birrell, B., Healy, E., & Kinnaird, B. (2016). Immigration Overflow: Why It Matters. Melbourne, VIC, Australia: Australian Population Research Institute.

Chand, M., & Tung, R. L. (2019). Skilled immigration to fill talent gaps: A comparison of the immigration policies of the United States, Canada, and Australia. Journal of International Business Policy, 2(4), 333-355.

Cooke, A., Kemney, T., & Rigby, D. L. (2016). Cheap imports and the loss of US manufacturing jobs. US Census Bureau Center for Economic Studies Paper No. CES-WP-16-05.

Galí, J. (2019). The effects of a money-financed fiscal stimulus. Journal of Monetary Economics.

Molintas, D. T. (2016). Impact of Globalization on the Australian Automobile Industry case of Ford Falcon.

Monras, J. (2018). Immigration and wage dynamics: Evidence from the mexican peso crisis.

Weske, M. (2019). Business Process Modelling Foundation. In Business Process Management (pp. 71-122). Springer, Berlin, Heidelberg.