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Economics Essays

Globalisation could create more employment opportunities as globalisation opens up the global market and jobs. Workers can take advantage of job opportunities across the globe, rather than just in their home country. Many MNCs have different divisions all over the world. This is especially the case in financial sector, banks such as HSBC have branches all over the world due to the time zone differences. This means even if high-skilled workers can’t find a job in the UK division, they might be able to find a job in another country (e.g the US). This reduces underemployment because it is ensured that each worker is fully utilising their potential and skill sets, rather than being forced to seek a job in a completely different field. However, globalisation could also cause unemployment within a country. Globalisation opens up the global market and jobs, therefore, in order to minimise production costs and increase profits, firms may move factories abroad to countries with with no or lower minimum wages. For example, in the Uk, minimum wages are £7.83 per hour. Whereas in some cities in China, minimum wage can be as low as £1 per hour. This could therefore lead to unemployment in countries with high minimum wage. For instance, after Dyson relocated their production wing to Malaysia in 2002, 800 semi skilled workers lost their jobs. This could lead to higher national unemployment rate. Moreover, some low-skilled workers might struggle to find a similar job if all firms are moving this division abroad. This could lead to structural unemployment.this unemployment leads to a reduction in wages and thus living standards