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3.4 Understanding work in the national and global economy

3.4 Understanding work in the national and global economy. Effects of Globalisation on the UK labour market. Workers are becoming internationally mobile and increasingly are moving between countries to find work. Citizens of the European Union (EU) have the freedom to work in any EU country.

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3.4 Understanding work in the national and global economy

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  1. 3.4 Understanding work in the national and global economy

  2. Effects of Globalisation on the UK labour market • Workers are becoming internationally mobile and increasingly are moving between countries to find work. • Citizens of the European Union (EU) have the freedom to work in any EU country. • Firms are increasingly choosing to locate their factories abroad to take advantage of lower labour costs and production costs.

  3. Foreign Direct Investment (FDI) • When a business from one country builds a factory in another • The UK is one of the top economies in the world for foreign direct investment - this means there is a lot of inward investment into the UK economy. • Reasons why foreign firms locate in the UK: • High-skilled labour force and higher quality production • Tariff-free access to the EU market • To buy existing UK-owned brads and distribution networks • The English language is the accepted international language of business • When foreign firms or MNCs decide to close a plant in the UK, the problems are: • Jobs are lost from the plant itself • Jobs are lost from other UK companies who supply that plant.

  4. Impact of migration on the UK economy • Migrate – the movement of people from one country or region to another • Mobility of labour – the ability of workers to change between jobs • Immigration – migration INTO a country • Emigration – leaving one’s native country or region to settle in another.

  5. Effects of immigration / emigration on the UK labour market: • Immigration affects the UK labour market by: + bringing new knowledge and skills, and filling gaps in the labour market + reducing wage inflation and increasing competitiveness + providing more workers to support the UK’s ageing population + increasing the number of consumers as well as producers. • Depresses wages, and can displace low-skilled UK workers • Increases strain on social services, education and hospitals • Emigration can affect the UK labour market by: • Losing valuable skills/human capital – BRAIN DRAIN + Reducing unemployment in recessions

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