Starter

1. Starter • What does Globalisation mean...can you remember? • How do you think globalisation effects labour markets in the UK?

2. GCSE ECONOMICS: UNIT 11 National & Global Economy 3.4 The impact of the global economy on Work

3. Aims of today’s lesson … • Understand the positive and negative effects of globalisation on the UK Labour market • Understand the nature of migration and its impact on the UK Labour market

4. The effects of globalisation on the UK Labour market • Globalisation is effectively making the world a smaller place • Globalisation has both positive and negative effects on the UK labour market • Workers are increasingly mobile, moving between countries to find work, especially in the EU

5. The effects of globalisation on the UK Labour market • Firms also look to locate their factories and operations abroad, often to take advantage of lower labour costs • A wide range of British Industries have moved their manufacturing bases outside the UK • Examples of UK companies moving their manufacturing operations abroad include; • Vodafone • BP

6. Advantages of UK firms operating overseas… • UK firms could take advantage of lower labour costs in countries where labour is sufficiently skilled for the jobs in question • If the exchange rate falls it will lower costs for the UK firm and provide incentive for them to operate part of their business abroad e.g. they will find that raw materials will be cheaper having to sacrifice less pounds • Firms may find that there are cost savings from moving closer to their target customer markets, saving on transportation costs for example • UK firms will have a better chance of competing in global markets, where they have base from which to quickly respond to changes in market conditions such as an increase in demand for their products or services or a change in peoples’ incomes

7. Disadvantages of UK firms operating overseas… • Jobs will be lost in the UK, when firms decide to move their operations abroad • Different countries have different legislation, languages and cultures which may restrict UK firms from making business decisions, reducing their ability to make a profit • Exchange rates could change increasing the costs involved in manufacturing goods or providing services, making trading more expensive, reducing profits from overseas factories • UK firms may find that labour in foreign countries are not as skilled, affecting the success of operations abroad

8. Case Study: Should I stay or should I go? • Nissan who have a manufacturing base in Sunderland are considering moving the plant overseas • What impact would this decision have on the following; • Employees of Nissan in Sunderland • Firms/employees of suppliers to Nissan in the UK • The local economy

9. Case Study: Should I stay or should I go? • There will be mass redundancies, unless the current workforce are willing to migrate overseas • Nissan in moving operations abroad will look to find alternative suppliers, meaning a loss of income and possibly employment for UK suppliers • The local economy will suffer as those individuals who previously worked for Nissan no longer have the disposable income to buy goods and services in the local communities.