International Management

Executive Summary

In the past few years, globalisation has become one of the most important factors that impact on human society and the economic situation in many countries. For instance, globalisation increases labour mobility as many people visit other foreign countries to seek job opportunities. This increasing labour mobility has some impact on the labour market in the host country and the labour itself. This report considers China and Singapore to illustrate these impacts.

There are many different impacts from the increasing mobility on the host countries. An increasing number of foreign workers may reduce the average wage in the host country due to an oversupply of labour, especially if the substitutability of the skills of natives and skills of foreign workers is close. This situation occurs in Singapore where average real wages have declined over the past decade when the foreign workers account for a larger and larger percentage in the total workforce. Alternatively, if the skills of foreign workers and natives are complementary to each other, then wage level could increase. This is the case in China where foreign workers work in industries such as textiles and manufacturing that require low skill levels. Chinese native workers instead prefer to focus more on industries such as telecommunications.

Furthermore, it evident that increasing labour mobility may lead to poorer working conditions as foreign workers are more willing to work in a worse environment than locals. There are some local employers that recruit foreign workers specifically because of this. This may, in the longer run, be beneficial to the local market as regulations are introduced that result in an overall improvement in working conditions for labour as a whole.

Introduction

Globalisation is one of the most important factors which impact the human society and economic situations widely and deeply over the past few years. As is pointed out by Torimiro & Okorie (2009),...