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Dubai Mall / Michele Solmi via Flickr

Clarifying the global employment trends

What to read and where

Welcome to The Broker’s dossier on employment. Global employment trends can be confusing. For example, they show an increase in the numbers of unemployed people while at the same time an increase in the amount of jobs. Population growth alone cannot explain the trends. Financial globalization, trade liberalization, and automation have all caused intensification in the skill mismatch on a local level and created fierce labour competition on a global level. The result is squeezed wages and job insecurity for the majority of workers. This dossier reveals that the labour policy debate should sharpen its focus and scope beyond the labour market and skills approach to include broader issues like taxation, financial regulation, trade policy, and technological innovation.

In our dossier, we found that a policy focus only on economic growth is not sufficient for addressing the issue of creating much needed decent and stable jobs. Nor is it adequate for addressing the ability of workers to compete in the changing international division of labour. Therefore, a critical rethinking of labour market policies on different levels and from different perspectives is required.In ‘Editorial: Employment needs more than GDP growth’, our Editor in Chief Frans Bieckmann elaborates on this by saying that "politics and policies focusing on the creation of a society in which labour serves the individuals and the collective, dignifies and enriches them". The current prevailing economic model used by governmental offices and board rooms is based on an inadequate set of assumptions, for example that productivity growth results automatically in higher real wages. However, according to Bieckmann, these assumptions are not valid.

Core articles

‘Fragile employment’, by our editors, Annemarie van de Vijsel andVanessa Nigten, gives an overview of recent trends in employment on a global and regional level. Over 200 million people worldwide are unemployed and looking for work. A much larger number of people, however, has a job, but one that is uncertain, unstable and precarious and does not help them out of poverty. Rising economic growth levels are not automatically translated into higher employment rates. The challenge is not only to create enough jobs for the growing world population, but also to create decent jobs.

‘Revaluing labour’, by our editor, Evert-jan Quak, examines the economic perspectives on job creation. It concludes that three global forces are increasingly affecting employment worldwide. Trade liberalization, automation and financial globalization result in displaced workers that cannot automatically find work in new competitive sectors. Although better education and skills are important to match the skills of workers with the needs in these sectors, these do not guarantee more and better paid jobs. The current debate focuses on the people who are losing out and offers possible solutions in the forms of job guarantees, tax credits and cash transfers to compensate for lower wages. However, the focus should instead be on the people who are the main winners of globalization. Therefore, the scope of the employment debate should be broader and also include taxation on capital, financial regulation, trade policy, and technological innovation.

‘Job insecurity as the norm’, by our editor, Bertil Videt and byDaniëlle de Winter, takes a closer look at how the global trends in employment affect the lives of the workers. With increased flexibilization in the industrialized world, argued to be a necessity for economic growth, employment is becoming more and more unstable and insecure. The group of working poor is growing in both Europe and the US, which is similar to what has long been the norm in the developing world. The flexicurity model has been promoted as an attempt to combine flexibility and security, but is criticized for being ambiguous or neglecting the security part. We see that the overall economic and political trends go in the direction of more flexibility and less security.

‘Profits without labour benefits’, by Rolph van der Hoeven, analyzes the declining share of labour within national income. Company profits and labour productivity have increased much more than wages in the past three decades, while corporate taxes and tax on capital have declined and taxes on labour remain the same or even increase. This is benefitting the global rich and results in increasing inequality between people that depend on wages for their income and a small group of rich that earn an income from the profits they make on the investments in the capital market.

‘Creating a global labour market’, by Niels Beerepoot, focuses on the effects of outsourcing and reshoring. Beerepoot concludes that the classification of who benefits or loses from globalization is no longer based on the sector in which one works or the skill group a person belongs to. Higher labour costs in Asian emerging economies, higher international transportation costs, and concerns about relying on faraway places for the delivery of goods all lead to a return, or ‘reshoring’, of factory production to the US and to Europe. Jobs will be created by reshoring, but this ‘manufacturing renaissance’ results in less jobs and lower wages due to automation, continuing global competition and a global convergence in the international division of labour.

In our research for this dossier, The Broker came across many reports and articles relevant to work and employment. You can read short summaries of these reports and books in this overview of resources, together with some suggestions for further reading.

Debate

The Broker starts an online debate and a live discussion on how to tackle these employment issues, further addressing the insights and conclusions from these articles. One of the main consequences of the current economic model is that profits are less invested in employment-generated economic growth. Productive employment or stimulating productive sectors that can generate enough employment, for example by investing in SMEs, might be a good start to consider. But what this entails, and what policies are needed to get there, is less clear. Therefore, the purpose of this debate is to explore the solutions that are needed to deal with the employment issue. Can solutions be found within the current economic model, or should we consider alternative economic models?We call on our readers to further examine these questions and possible solutions. You can send your contributions to the debate to: debate@thebrokeronline.eu.

Co-readers

We would especially like to thank co-readers of the core articles:Arjan de Haan,Rolph van der Hoeven,Dennis Arnold,Abdoul Mijiyawa,Jens Lind, Niels Beerepoot,Jan Rieländer, andWiemer Salverda.We hope you enjoy reading our employment dossier.

Photo credit main picture: Dubai Mall / Michele Solmi via Flickr