The challenges of globalization. A fast-changing world of work

Gender! A Partnership of Equals
Geneve: International Labour Office, 2000. 115 p.

The challenges of globalization
A fast-changing world of work

Globalization is the progressive integration of societies and national economies in different parts of the world. It is driven by the interaction of technological developments, trade and investment policy reforms, and the changing production, organizational and marketing strategies of multinational companies. The pace and depth of globalization differ across countries and regions, but the main economic aspects of the process are essentially the same.

Effects of Globalization

Competition has intensified among firms in export markets and among countries seeking to attract and increase incoming foreign direct investment
New locations for production are emerging around the world as multinational companies internationalize production and concentrate on product specialization
Multinational companies are playing a central role. Their total incoming and outgoing foreign direct investment stocks amounted to 21% of world gross domestic product (GDP) in 1997
Short-term financial transactions are outstripping world exports. For instance, in1989 average daily turnover in foreign exchange markets worldwide was 56 times the daily volume of world exports of goods and services. In 1998 it was at least 78 times more, according to the ILO
Technological innovation, and especially the convergence of information and communication technologies, have transformed production processes, shortened product life cycles and revolutionized services by making more of them tradeable

Globalization: The opportunities

Jobs are being created as business opportunities increase with the reduction of trade barriers and the decentralization of production to take advantage of benefits specific to the location of their facilities (e.g., low-cost unskilled and skilled labour). The most striking is the case of export processing zones (EPZs), as described elsewhere.

Other developments are the subcontracting of activities by companies, greater specialization and new forms of work organization. All have some positive direct and indirect effects on employment. The spread of subcontracting has generated at least 200 million jobs worldwide. New forms of work organization have been accompanied by a rise in non-standard forms of employment, with advantages for certain groups. Workers with family responsibilities, highly skilled professionals, migrants and adults undergoing some form of training have been able to opt for part-time, temporary, home-based and fixed-term employment.

Greater specialization and the widespread application of advanced technologies have stimulated a rise in demand for skilled labour in fields such as information technology (IT), specialized financial and other business services, materials engineering and biotechnology. On the whole, job opportunities for women in high-growth sectors remain limited, mainly because of lack of required skills.

Mixed experiences

Available evidence suggests that as a group, women are lagging behind when it comes to the gains from globalization. What accounts for this? Certain structural factors, among others, help to explain:

Technological change and specialized production strategies tend to favor skilled and well-educated workers - a category in which women are severely under-represented
Investing in skills in those segments of the labour market in which women are predominant are considered to yield lower returns. Therefore, opportunities for skills upgrading at the enterprise level are fewer than those which exist for men
Whether they are in export-oriented or import-competing industries, women are in jobs which are more likely to be subcontracted, relocated abroad or eliminated by labour-saving technologies
Amid growing competitive pressures, new forms of work organization are being introduced by many enterprises as part of their efficiency-enhancing and cost-saving strategies. This leads to a rise in non-standard employment; i.e., lack of job security (certain enterprises do not give written employment contracts), limited possibilities for training and career advancement, and inadequate social security coverage in terms of old-age pensions, sickness insurance and maternity protection
The traditional gender disparities in wages appear to be widening in globalizing economies. This may be explained by the cumulative effects of persistent discriminatory practices, a deepening polarization of skilled and unskilled labour with women being caught in a "low-skilled/low-paid jobs trap", and low unionization rates which exclude them from the coverage of collective agreements which set basic pay rates and working conditions

Policy responses

Some degree of government intervention, with the involvement of the social partners, would seem justifiable in order to attain the twin goals of growth and equity. Measures may include:

Passing equality-promoting legislation to protect women against discriminatory practices with respect to recruitment, remuneration and promotion
Strengthening labour inspection services to monitor the implementation of national labour standards
Extending collective agreements to cover non-organized workers in specific sectors and industries where pay and working conditions compare unfavourably with those of organized workers in the same sectors and industries
Reforming social insurance systems to enable workers in non-standard employment to have better coverage
Improving social "safety nets" to guarantee minimum standards of protection for vulnerable groups such as the working poor, the long-term unemployed and single-parent households
Setting enrollment and graduation targets for girls and women in educational institutions at all levels, with a view to raising knowledge and skills which would enhance their employability
Instituting curriculum reforms, scholarship programmes and advisory services, to orient women to disciplines and training programmes in fields for which labour demand is forecast to grow
Encouraging social dialogue and active participation by employers' and workers' organizations in policymaking, and developing programmes which focus on:
Improving women's access to enterprise-based apprenticeship programmes and on-the-job training for workers
Targeting the retraining of women in non-traditional fields and providing various forms of assistance to those women wishing to set up their own businesses, paying particular attention to rural-based women who want to diversify into non-farm activities
Providing adequate child care and other services to facilitate women's employment and labour market re-entry after interruptions for family-related reasons

Gender inequalities in the labour market and at the level of the workplace are not new, but the changes associated with globalization appear to be accentuating the effects of attitudinal, policy-related and structural factors which have long interacted to limit women's social and economic progress. The appropriate mix of policies for addressing these issues will necessarily differ across countries, but there are four "social pillars" which ought to underpin whatever measures may be taken to spread the gains from globalization among workers in general, and women workers in particular.

The four social pillars

Equality of access to education and training
A well functioning social safety net
Labour regulations which combine the need for adaptability with that of protection
The observance of core labour standards

Gender! A Partnership of Equals Geneve: International Labour Office, 2000. 115 p.

The challenges of globalization A fast-changing world of work

Gender! A Partnership of Equals
Geneve: International Labour Office, 2000. 115 p.

The challenges of globalization
A fast-changing world of work