Globalisation and Its Dimensions

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Questions and Answers

What is one of the primary effects of globalization on employment in advanced economies?

Uniform increase in living standards

Reduction in the collective bargaining power of trade unions (correct)

Increased job creation in the manufacturing sector

Stabilization of wages across all sectors

How does the importation of finished products from low-wage countries impact wages in developed economies?

It can lead to a reduction in workers' wages (correct)

It generally increases the wages of domestic workers

It stabilizes wages by creating competition

It offers more job opportunities in high-paying sectors

What does the term 'race to the bottom' refer to in the context of globalization?

The steady increase in living standards for all workers

The increase in investments in domestic manufacturing

The competition between countries to create more job opportunities

The downward pressure on wages due to competition from global markets (correct)

What is one consequence of foreign direct investment in low-wage countries?

Reduced investment in the domestic manufacturing/service sectors Signup and view all the answers

Which of the following is a consequence of workers moving from manufacturing to lower-paying service jobs due to globalization?

Downward wage pressure on existing service jobs Signup and view all the answers

What is the primary definition of globalisation?

The expansion of economic and social ties between countries. Signup and view all the answers

Which of the following is NOT a driver of market globalisation?

Increased tariffs and trade barriers Signup and view all the answers

What impact does contagion have on national economies within the context of globalisation?

It leads to the rapid spread of financial crises between countries. Signup and view all the answers

What is a significant firm-level outcome of globalisation?

Internationalisation of the firm's value chain. Signup and view all the answers

Which statement best describes the relationship between national economies as influenced by globalisation?

There is a continuous integration and inter-dependence of national economies. Signup and view all the answers

How do multinational corporations (MNCs) relate to globalisation?

They are considered agents of globalisation. Signup and view all the answers

What does the term 'offshoring' refer to within the context of globalisation?

The transfer of business processes to another country. Signup and view all the answers

What is one social outcome of globalisation?

Effects on national culture. Signup and view all the answers

Which outcome is commonly associated with the globalisation of production activities?

Strengthened interdependencies among nations. Signup and view all the answers

What aspect of globalisation contributes to the flight of jobs?

Offshoring of labor to lower-cost regions. Signup and view all the answers

What has driven the intensification of international trade and foreign direct investment (FDI) over the past quarter-century?

Multinational firms Signup and view all the answers

Which international trade union organization was established in 1949?

International Confederation of Free Trade Unions Signup and view all the answers

What major change occurred to the ICFTU in 2006?

It merged with the World Confederation of Labour Signup and view all the answers

What primary challenge has international trade unionism faced since the 1990s?

Reorganizing its structures and strategies Signup and view all the answers

What is one consequence of multinational corporations shifting investments to countries with lower social protections?

Deterioration of working conditions in industrialized countries Signup and view all the answers

How have trade union organizations been encouraged to adapt to globalization challenges?

By engaging more with supranational spaces Signup and view all the answers

What has fueled competition between workers in developed and developing countries according to the presented concepts?

Shifts in multinational corporations' investments Signup and view all the answers

What is one way international trade unions aim to ensure respect for social rights?

By engaging in international advocacy Signup and view all the answers

What is the primary mission of ITUC?

To promote workers’ rights and interests through international cooperation. Signup and view all the answers

Which area is NOT a focus of ITUC's main activities?

Youth education programs Signup and view all the answers

Which international organizations does ICFTU/ITUC primarily collaborate with?

ILO, OECD, and UN Signup and view all the answers

What document did ICFTU begin campaigning for in the 1970s to regulate multinational firms?

ILO’s 1977 Tripartite Declaration of Principles Signup and view all the answers

What are the Core Labour Standards outlined in ILO’s Declaration of Fundamental Principles and Rights of Work?

Eight specific conventions in labor rights Signup and view all the answers

Since the 1990s, which group has worked with ITUC to promote a social clause in international trade agreements?

International Trade Secretariats Signup and view all the answers

What was a major outcome of ITUC’s involvement in ILO’s Global Jobs Pact in 2009?

Guidance for economic recovery and job creation Signup and view all the answers

Which statement best describes ITUC's vision for the global economy?

Promote social justice and address economic inequalities. Signup and view all the answers

What is a primary characteristic of a multinational corporation (MNC)?

Has subsidiaries in two or more national economies Signup and view all the answers

What does foreign direct investment (FDI) primarily aim to achieve?

Control over marketing and production in another economy Signup and view all the answers

Which of the following is NOT a method of foreign direct investment?

Franchising local businesses Signup and view all the answers

How has foreign direct investment growth from 1992 to 2006 compared to international trade?

FDI grew significantly faster than international trade Signup and view all the answers

Which aspect of MNCs contributes to their role as agents of globalization?

Expansion through foreign investments Signup and view all the answers

What trend in international trade can be inferred from the average tariff rates provided?

Tariff rates show a decreasing trend across major economies Signup and view all the answers

Which economic factor is essential for MNCs in the context of globalization?

Innovation in production technologies Signup and view all the answers

What does the decline of trade union movements indicate in advanced economies?

Weakening of collective agreement coverage Signup and view all the answers

What effect does globalization have on domestic firms competing with MNCs?

Domestic firms face low-cost imports and increased competition Signup and view all the answers

Which of the following metrics reflects the significant growth of FDI from 1980 to 2008?

World FDI amounted to $14909 billion by 2008 Signup and view all the answers

What role do technological changes play in the globalization process?

Technological changes enhance global production networks Signup and view all the answers

How do MNCs influence wages in host countries?

They can weaken local bargaining leverage of unions Signup and view all the answers

What is one notable outcome of MNCs in the context of globalization?

Enhanced transfer of ideas and technology Signup and view all the answers

Which of the following statements about international trade barriers is accurate?

Declining trade barriers have facilitated globalization Signup and view all the answers

What is primarily achieved through foreign direct investment (FDI) by multinational corporations?

Complete control over local marketing and production activities Signup and view all the answers

Which of the following best describes a characteristic of a multinational corporation (MNC)?

Possesses subsidiaries in two or more countries Signup and view all the answers

What trend regarding trade barriers is observed in the context of globalization?

Average tariff rates on manufactured products have declined over time Signup and view all the answers

How does foreign direct investment (FDI) growth from 1992 to 2006 compare to production output worldwide?

FDI growth was significantly higher than both global production and international trade Signup and view all the answers

What is a common outcome of multinational corporations' investments in developing economies?

Introduction of new technologies and ideas Signup and view all the answers

Which of the following best represents the relationship between globalization and employment in advanced economies?

Globalization may weaken union bargaining leverage through the transfer of jobs to lower-cost countries Signup and view all the answers

What key factor has influenced the growth of foreign direct investment (FDI) in developed economies from 1980 to 2008?

Expansion of multinational corporations seeking new markets Signup and view all the answers

Which of the following is a result of declining trade union movements in advanced economies?

Weaker wage structures and declining labor standards Signup and view all the answers

What major challenge have trade union organizations faced due to globalization?

Need for improved worker representation internationally Signup and view all the answers

Which organization was formed by the merger of ICFTU and WCL in 2006?

International Trade Union Confederation Signup and view all the answers

What is the primary purpose of the social clause proposed by the ITUC in WTO statutes?

To ensure products comply with international core labour standards. Signup and view all the answers

How have multinational corporations affected job competition between countries?

By shifting investments to lower-wage countries Signup and view all the answers

What transformation has international trade unionism undergone since the 1990s?

Reorganization and strategy review to boost unity Signup and view all the answers

What is one of the actions called for by ITUC to regulate multinational corporations?

Building networks and trade union organizations within MNCs. Signup and view all the answers

What significant change occurred to the International Trade Union Confederation (ITUC) in 2002?

It united under a collective network as Global Unions. Signup and view all the answers

Which economic change has highlighted the necessity for renewed worker representation internationally?

Intensification of international trade and FDI Signup and view all the answers

What is a characteristic feature of the Global Union Federations (GUFs)?

They are organized internationally by employment sector. Signup and view all the answers

What is one of the proposed roles of international trade unions in the context of globalization?

Utilizing supranational spaces for social rights Signup and view all the answers

What does ITUC consider as complementary but not sufficient for the protection of trade union rights?

Corporate Social Responsibility policies. Signup and view all the answers

Which aspect of multinational corporations has contributed to competition among workers globally?

Shifting investments to countries with inferior work conditions Signup and view all the answers

What is a primary focus for the International Trade Union Confederation (ITUC)?

Advocating for fundamental social rights Signup and view all the answers

Which statement best describes the outcome of multinational corporations relocating to countries with lower social protections?

Deterioration of working conditions in developed countries Signup and view all the answers

What is one of the main areas of activity for ITUC?

Lobbying for labor rights and equality Signup and view all the answers

Which declaration outlines the Core Labour Standards as established by ILO?

ILO’s Declaration of Fundamental Principles and Rights of Work Signup and view all the answers

What is the impact of increased foreign manufacturing capacity on domestic job creation in advanced economies?

It results in significant reduction of domestic job opportunities. Signup and view all the answers

How do low wages in developing countries generally affect wage levels in advanced economies?

They result in wage reductions in advanced economies. Signup and view all the answers

What role has ICFTU/ITUC specifically played in relation to international organizations?

Lobbying and working closely on labour and trade union rights Signup and view all the answers

What effect does the threat of foreign competition have on workers’ wages in developed economies?

It can force workers to grant wage concessions. Signup and view all the answers

What document did ICFTU begin campaigning for in the early 1970s regarding multinational firms?

ILO's 1977 Tripartite Declaration Signup and view all the answers

What significant event did ITUC’s involvement directly influence in 2009?

The adoption of ILO's Global Jobs Pact Signup and view all the answers

Which of the following outcomes is a result of trade driving workers from manufacturing to the service sector?

A reduction in wages for service sector workers. Signup and view all the answers

What is NOT an area of focus for ITUC's primary mission?

Creation of financial markets Signup and view all the answers

What is one consequence of the decline in trade unions in advanced economies?

Increased downward pressure on wages. Signup and view all the answers

In what context has ITUC lobbied major international financial institutions?

For an alternative vision of global economics focused on social justice Signup and view all the answers

Which of the following factors contributes to increased inequality among employees in advanced economies?

Concentration of job losses in certain industries. Signup and view all the answers

What does the phenomenon termed 'race to the bottom' typically describe in the context of globalization?

The downward trend in jobs and wages due to competitive pressures. Signup and view all the answers

What initiative has been promoted by ITUC and its collaborators since the 1990s?

Adopting a social clause in international trade agreements Signup and view all the answers

Which effect does globalization have on service sector employment in advanced economies?

It often results in lower-paying jobs replacing manufacturing roles. Signup and view all the answers

What was one result of the collaboration between ICFTU and WHO in the late 1990s?

Formulation of standards for occupational health and safety Signup and view all the answers

What aspect of globalization does ITUC focus on when working with trade unions and NGOs?

Promoting international solidarity Signup and view all the answers

How does globalization contribute to the phenomenon of job exportation?

By enabling companies to relocate jobs to lower-wage countries. Signup and view all the answers

What happens to living standards in advanced economies as a result of the pressures associated with globalization?

They decline significantly. Signup and view all the answers

Study Notes

Globalisation

Globalisation is the expansion of economic and social ties between countries through the spread of corporate institutions and capitalist philosophy.
It can be argued that we are not as globalised as some believe due to nation-states' enduring influence on their economies.
National economies play a central role in globalization, with trade and investment fostering interconnectivity.

Drivers of Globalisation

Reduction of trade and investment barriers worldwide.
Adoption of free markets and market liberalisation.
Integration of global financial markets.
Technological advancements.

Dimensions of Globalisation

Integration and interdependence of national economies.
Growth of global investment and financial flows.
Globalisation of production activities across international networks.
Globalisation of services.

Contagion: the rapid spread of financial or monetary crises between countries.
Offshoring and the flight of jobs.
Impact on wages, potentially leading to a race to the bottom.
Effects on national culture.
Loss of national sovereignty.

Firm-Level Outcomes of Globalisation

Countless business opportunities for internationalised firms.
New risks and intense rivalry from foreign competitors.
Internationalisation of firms' value chains.

The Multinational Corporation (MNC)

An MNC is a company with operations or subsidiaries in multiple countries, expanding through foreign direct investment (FDI).
FDI can be through mergers and acquisitions (M&A) or "greenfield" investments, building new facilities.
MNCs aim for partial or complete control over marketing, production, or other activities in foreign economies.
MNCs are seen as agents of globalisation, spreading ideas, tastes, and technology worldwide.

Factors Driving MNC Growth

Declining trade barriers.
Technological change.
Foreign Direct Investment (FDI).
Global production networks.

The Impact of Globalisation on Jobs and Incomes

Globalisation, through trade and FDI, can impact jobs and wages.
MNCs' operations can create jobs but also lead to job losses in domestic firms due to the threat of low-cost imports and offshoring.
Weaker union bargaining power due to global competition.
Globalisation can expose workers to competition from low-wage countries, potentially resulting in downward pressure on wages and declining living standards in advanced economies.

The International Trade Union Movement

The International Trade Union Confederation (ITUC) is the largest global union body, advocating for worker rights and interests.
The ITUC works with international organisations such as the ILO, OECD, and the UN to address labour and trade union rights concerns.
The ITUC lobbies major international financial institutions and heads of state to promote a global economy based on social justice.
The ITUC's efforts contributed to the adoption of the ILO's 2009 Global Jobs Pact, aimed at economic recovery, job creation, and enhancing social protection for workers.
The ITUC advocates for the inclusion of social clauses in international trade agreements.

Key Issues for International Trade Unions

The ITUC has worked to develop rules of conduct for multinational corporations.
Advocate for the implementation of social policies, employment, and labour relations within MNCs.
The ITUC was instrumental in formulating the ILO's Declaration of Fundamental Principles and Rights of Work (1998).
The Declaration identifies eight core labour standards.

Key Strategies of The International Trade Union Movement

Lobbying and working with international organisations.
Campaigning for rules of conduct for MNCs.
Promoting the inclusion of social clauses in international trade agreements.
Working with NGOs and International Trade Secretariats (ITSs) to address global issues.
Promoting a social justice-based global economy.

Multinational Corporation (MNC)

A firm with subsidiaries in multiple countries.
Expands through foreign direct investment (FDI), which can involve buying existing facilities (M&A) or building new ones (greenfield investment).
Purpose of FDI is to gain control over marketing, production, or other activities in another economy.
Investments can be in services, manufacturing, or commodity production.
Spread ideas, tastes, and technology globally.

Globalization

MNCs are key agents of globalization.
Globalization is driven by declining trade barriers, technological change, and foreign direct investment.
MNCs contribute to global production networks.

Trade Barriers

Average tariff rates for manufactured goods have significantly declined since 1913.
This decline is evident in countries like France, Germany, Italy, Japan, Holland, Sweden, Great Britain, and the United States.

Global Trade and Production

World trade and world production have both increased significantly from 1950 to 2004.
World production has increased by a factor of 7.5, while total merchandise exports have increased by a factor of 26.

Foreign Direct Investment (FDI)

FDI growth has outpaced both production output and international trade growth.
Increased 700% to 883% from 1992 to 2006.
Global FDI stocks in 2009 were 30% of world GDP, up from 10% in the early 1990s.
FDI has grown from 692.7billionin1980to692.7 billion in 1980 to 692.7billionin1980to14,909 billion in 2008.
Developed economies account for a majority of FDI, with developing economies seeing a significant but slower increase.

Global Production Network Example: Boeing

Demonstrates the interconnectedness of production processes across national borders, a key feature of globalization.

Globalisation, Jobs, and Incomes

Impact of Politics and Ideologies: Neo-liberalism, deregulation, and weaker union bargaining power can influence the impact of globalization on jobs and wages.
Challenge of Global Competition: Low-cost imports from developing countries can exert downward pressure on wages in advanced economies.
Employment Relations - The Power Dimension: MNCs can move production to lower-cost locations, threatening jobs and potentially reducing union bargaining power in advanced economies.

Globalisation, Jobs & Incomes: Advanced Economies

Trends in Labor Market Institutions: Decentralized collective bargaining, productivity bargaining, wage flexibility, and greater emphasis on skills development.
Trade Union Weakening: Membership decline and decreasing collective agreement coverage.
Declining Labor Standards?: Potential for a "race to the bottom" in labor standards as companies seek out lower-cost countries.
Undermining of Employment, Jobs, and Wages:
- Reduced manufacturing employment due to imports from low-wage countries.
- Low wages in developing countries can exert downward pressure on wages in advanced economies.
- Threat of relocation can lead to wage concessions for workers in advanced economies.
- Large increases in FDI to other countries can reduce domestic investment and job creation in advanced economies.
- Shift to lower-paying service sector jobs can further reduce wages.
Summary: Undermining of trade unions, job losses, downward pressure on wages, declining living standards, and increased inequality between workers exposed to foreign competition and those sheltered from it.

International Trade Union Movement Confronting Globalization

Structure: National/regional organizations, international trade union confederations (ITUC), and Global Union Federations (GUFs).
Need for International Cooperation: Rising international trade and FDI driven by MNCs require coordinated worker representation.
MNCs' Impact on Working Conditions: MNCs are often seen as contributing to deteriorating working conditions in industrialized countries by investing in countries with lower labor standards.
International Trade Unionism Reorganization: Trade unions have restructured to strengthen unity and address global challenges.
ITUC (International Trade Union Confederation): Formed in 2006 by merging ICFTU and WCL. Promotes workers' rights through international cooperation, campaigning, and advocacy.
ITUC Activity: Focus on trade unions and human rights, economy, society, and the workplace, equality and non-discrimination, and international solidarity.
Lobbying and Working With International Organizations: ITUC actively engages with the ILO, OECD, and the UN on labor and trade union rights.
Campaigning for MNC Conduct Rules: ITUC played a key role in developing the 1977 ILO Tripartite Declaration and the OECD Guidelines for Multinational Enterprises.
ILO Core Labor Standards: ITUC and ITSs contributed to the development of the 1998 ILO Declaration of Fundamental Principles and Rights of Work and its focus on eight core labor standards.
Social Clause in Trade Agreements: ITUC and ITSs advocate for social clauses in trade agreements to ensure compliance with core labor standards.
Global Economic and Social Justice: ITUC lobbies international financial institutions and world leaders for a more socially just global economy.
ILO Global Jobs Pact: ITUC's influence led to the adoption of the 2009 Global Jobs Pact, guiding policies for economic recovery, job creation, and social protection.
WTO Social Clause: ITUC supports a WTO social clause to require all products traded between countries to be produced and distributed in compliance with core labor standards.
Regulating MNCs: ITUC advocates for regulating MNCs to protect trade union rights, promote worker rights within MNCs, and negotiate International Framework Agreements (IFAs).
Corporate Social Responsibility (CSR): ITUC sees CSR policies as complementary but not sufficient to address labor rights concerns.

Global Union Federations (GUFs)

Origin: Established in the late 19th century as ITSs (International Trade Secretariats) and became GUFs in 2002 under the network Global Unions.
Structure: Organized by employment sector, trade, and industrial sector.
Representing Economic Interests: Devoted to representing the economic interests of their affiliated organizations.
Number: From approximately 30 ITSs in the 1960s to 10 GUFs currently.
Operational Structures: GUFs are considered the most operational structures within international trade unionism.

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Description

This quiz explores the concept of globalisation, including its drivers, dimensions, and social outcomes. It examines how national economies are interconnected through trade and investment and highlights the impact of technological advancements. Test your knowledge on the complexities of globalization and its effects on our world.