Understanding Labour Mobility And Its Effects On Different Countries

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Types of Labour Mobility

The term labour mobility can be defined as the process following which labourers can freely move between the Economic zones of different countries. According to Krabel and Flöther (2014), in the article, Here today, gone tomorrow? Regional labour mobility of German university graduates, it has been discussed that, labour mobility gives labourers the power to be an intimate part of any Economic system as well as freely move through and in between different economic zones. Labour mobility remains an interesting topic for anyone to ponder upon in order to understand the impact that it has on the Economy of any country as it is one of the massive driving forces of the production industry. Labour mobility also majorly affects growth and production thus creating a big impact on the economy. Labour mobility is roughly a new concept as in the past, it was almost impossible for the labourers to go around move freely across different boundaries as the political, economic and demographic conditions were different. With the advent of an egalitarian economic condition globally, it has been much more easier for the workers to move freely, earning their daily bread. The following paragraphs will discuss in depth about the international labour mobility and the several effects that it has on different countries.

Since the beginning of the mid eighties it has been all the more common, that the phenomenon of the cross border free flowing capital and the massive flow of cross border commodities summoned a growth in cross border labour flows. The international labour mobility across international borders increased due to the political and legal conditions of the governments who were based in the receiving countries. Besides, the path of globalization beckoned workers throughout the world to move to places and countries that have a high rate of industrialization. Globalization came with vices like strict immigration policies but the mid eighties started seeing receiving countries encouraging workers from all over the world to gather at industrialized cities to earn wages that are higher and more convenient to earn than the wage offered to them at their home country (Taiwo 2013). Countries with the highest amount of industrialization once also boasted the most restrictive policies concerning immigration of foreign workers, yet they were totally liberal on their views on capital and trade flows, cross border.

Labour mobility also can be referred to the the degree to which the workers are willing or able to move between occupations, jobs and geographical areas (Boschma, Eriksson and Lindgren 2014). Sometimes labour mobility changes the grading or status of the worker just like it happens in vertical mobility. On the other hand, in horizontal mobility, the grading of the workers remain the same. Skilled workforce and labourers showcase high geographical mobility while they face low occupational mobility. The unskilled or low skilled workers show both occupational as well as geographical mobility. Besides, every time there is a low labour mobility, there occurs a situation of structural unemployment, which government across all borders and countries try to flee and void. It is always of concern to the government to birth new retaining schemes for the workers as well as establishing new industries in the areas that may attract a degree of unemployment.

Geographic Mobility

There are mainly two types of labour mobility. The first type is the Geographic mobility which predominantly refers to a worker’s ability to remain active in his or her working field in any given physical location. On the other hand, the occupational mobility refers to any workers ability to change the nature of his or her jobs. For reference, we can present the example of a worker who is a resident of England and moves physical boundaries to arrive at the United States of America in order to join a job of the same nature as his previous jobs (Fratesi 2014). This is primarily an example of geographic mobility while on the other hand, an example of a pilot joining the automobile industry, abandoning the previous nature of job only to indulge in a job with a completely different nature will be an ideal example of occupational mobility.  

To talk about geographic mobility, it does showcase important and considerable implications on the economy of any given country as easing immigration policies and requirements can do wonders for the economy of any country. It, first of all, increases the supply of labourers. With the entrance of a higher number of employees in the economy, the supply of general labour increases significantly. Besides, it helps to decrease the wage rates as although there would be a supply of labour and a significant increase in it, there would also be a static amount in the way the labour would be hired by employers. A static demand for labour thus decreases the wage rates. Geographic mobility also gives birth to the menace of unemployment. As in this situation, there would be always a greater supply of labourers than actually needed, a surplus of workers will remain stable. There take the genesis of a situation where there would be more workers than there are jobs to accommodate them. However, geographic labour mobility also increases the rate of productivity. The labour or employees hired by any organization will be a mix of both skilled and unskilled workers. While the cheaper unskilled workers learn from the hardworking and niched skilled workers, the rate of production rises with a stability. Skilled workers in any labour force increase productivity in multifold as they also drive out unskilled workers who are not able to cope up with their expertise and niche.

Geographic mobility must not be seen in the light of only the economy as it an amalgamation of different factors. It is also deeply affected by government control and state sovereignty. The government who are patrolling the borders of their countries with an eye to the most intricate detail always remain conscious and concern about what might enter their borders. The government always remain insecure about the nature of labourers that they are welcoming through their ports, cities and borders. According to Huelser and Heal  (2014), in the article Moving freely?: labour mobility in ASEAN, it has been discussed that, even though geographic mobility always plays a positive role on the economy of any country, it is also true that the labourers who enter borders of a foreign country are generally the first and foremost to suffer the wrath of the governing body of the foreign country. They also generate discriminatory glances from the indigenous citizens of the abroad or foreign countries. Thus immigration remains a topic that is a double edges sword, full of curiosity and dichotomy.

Occupational Mobility

A reduction in geographic mobility can also be achieved through treaties or economic arrangements between countries. A host country can always increase the rate of work visas that they give out or it may suddenly reduce the amount of work visa they are giving out in order to control the influx of the workers coming in to work in the host countries from foreign countries. To understand this concept in depth, the example of the countries in the European Union can be taken into consideration. The worker or group of workers that are part of the European Union will be at an advantage of entering European territories and work freely. These workers will always have advantages relating to their visas which also belong to the countries belonging to the European Union. While these workers face an advantage, there will always be workers who are not part of the countries belonging to the European Union and thus face discrimination concerning the working condition, wage rates and visa related legalities. Above all these discussions, one thing must be remembered which is that the effectiveness of labour mobility across geographical boundaries will remain thoroughly dependent on the workers. If a situation occurs, that the other part of the countries or other foreign host countries offers a situation that of job scarcity, it is evident and obvious that the migrating workers would stop venturing the cross boundary opportunities.

The second form of labourer mobility is known as the occupational mobility. It can be referred to the ease of movement from one nature of the job to a completely different job, with a very different nature that any employee will pursue. The employees, if able to move rather quickly from one nature of the job to the other, only increase the chance of any country going towards a positive economic development. History favours occupational mobility as the hunters and gatherers chose to opt for a job of a different nature. Thus society moved from the hunter and gatherers society to that which consisted of farmers.  

In the article, An exploration of labour mobility in mining and construction: who moves and why, it has been mentioned that, had the occupational mobility not been taken place, the society would remain stagnant and stop growing all together as it remained to ponder upon only one type of job, that of hunters and gatherers (Atkinson and Hargreaves 2014). If any economy of any certain country let the doors open for occupational mobility, an increase in economic growth can be seen. It increases the supply of the workers in any particular industry. If restrictions are lower for any worker to change his or her job sector, it would also be easier for a cross boundary and cross cultural employers to quickly hire a bunch of new employees who are ready to meet the employee appointment needs. As the restrictions to enter a different sector of job decreases, the demand for appointing a new set of labourers are readily met. Occupational mobility also helps the employers to maintain lower rates of employee remuneration. When it is relatively easy for labourers to enter a particular industry, it has been seen that the supply of workers increases with a stability for any given demand. This phenomenon lowers the wage rates and continues to do so with élan until there comes a point of reaching the equilibrium.

Effects of Labour Mobility on the Economy

Occupational mobility also helps the newly formed industries to reach the zenith of economic growth. It allows the nascent industries to achieve their best form of growth. At the inception of the shift of any economy from an old profile of industry to a new form, there remains a constant demand for employees who are ready to take up the new venture and run the industries (Miguelez and Moreno 2013). The moment arrives such that it is necessary for any industry to rely on workers who are willing to perfect the new nature of the industry and learn from their mistake as well as learning as they grow. If there was no occupational mobility, these type of nascent industries will never be able to stand on their own and diminish as soon as they reach inception point.

 In the article, Labour Mobility in Europe: An untapped resource?, it has been clearly mentioned that an industry that favours employees changing their job profiles according to the need will always continue to grow (Barslund, Busse and Schwarzwälder 2015). A shortage of employees will lead these newly formed forms of jobs to be doomed. Thus, it is necessary for the industry to support some form of occupational mobility so that there is enough number of employees who are ready to work or provide service as well as working and operating the machines which are required for any nascent form of industry or job profile to remain functional. Occupational mobility can be also restricted through the passing of new and stringent regulations. If employers and industries make it mandatory for employees to have certain forms of experience, degrees or vocational training or educational requirements, they would be able to sieve out the potential skilled employees by barring employees easily moving towards different verticals of job profiles. The example of the healthcare industry remains a very good example here. It has been seen that physicians, surgeons, nurses and other healthcare workers remain specialized skills and degrees or training to remain in the healthcare industries.

It is nearly impossible for any worker belonging to a different job profile to penetrate the healthcare sector unless he or she receives a certain degree of training which gives him or her the authority to be a legal or genuine healthcare worker. These policies restrict the supply of healthcare workers in this particular field of job needs skilled sieving of employees who are knowledgeable and well trained. This particular niche also lets the healthcare workers be in high demand and it also gives them a certain right to claim the higher amount of wages. The rarity of their skill and the scarcity of healthcare jobs make it one of the most expensive job sectors in the existing industry (Fries-Tersch, Tugran and Bradley 2016). The demand for healthcare workers when paired with a scarce supply only increases the equilibrium of wage. This also means that the workers or workforce is forced into industries that have fewer restrictions so as to keep the wage rates at their minimum. It has been seen that to keep the wage rates lower, the supply of workers is always kept higher than the demand of workers.

Pros and Cons of Labour Mobility

The country of origin of the workers or the home country of the workers that choose to migrate definitely suffers some changes in their economy as well as the changes that are inevitable in the economy of the host countries that these migratory workers take refuge into. The host country is bound to face some demographic shortage as the host country may permit the migratory worker with permanent residence allowance. The permanent residence allowance also let the country of origin face the loss of demographic potential as the migratory workers would reproduce offspring in the foreign land and mostly never to return back to their home country. The children of the migratory workers only strengthen the workforce of a foreign country, abandoning their home country completely.

The country of origin also risks the loss of young graduates leaving the home country and creating a loss of an intellectually strong workforce who would be ready to grasp anything and learn quickly. The home country also loses the right to employ bright students and fresh graduates who, with their bright minds and quality experience turn to foreign companies and multinational companies to seek employment. The loyalty of these young workforces never remains with the industries of the home country as they shift their loyalty to the host country and its economy. For the host country, it must be noted that the more swift movement the workers can achieve the more rapid growth the host country and its industries can achieve.

Conclusion

In conclusion, it can be inferred that, the movement of the workforce also determines how quickly the changing nature of the marketplace and the technology can be grasped by the industries of the host countries. The mobility of the labourers also determines innovative industries’ growth and survival (Beerepoot and Hendriks 2013). The host country suffers a backward economic condition if they force restrictions on the mobility of the labourers but would achieve rapid growth if they consider labour mobility to be a piece of cake procedure, a hassle-free phenomenon for the workers. It can also be inferred that labour mobility depends on the restrictions of the host country to which the labour force would migrate to, seeking new and better opportunities. The slower the access to the workers of the foreign lands a foreign country may present, the slower the rate of economic growth that country may achieve. On the other hand, fewer restrictions would not only let the wage earners, the labourers earn a better standard of life, but it would also benefit the employers of the foreign land to continue hiring skilled labourers with minimum or lower wage in order to maintain a stability of industrial growth.

Reference

Atkinson, G. and Hargreaves, J., 2014. An exploration of labour mobility in mining and construction: who moves and why. National Centre for Vocational Education Research, Adelaide.

Barslund, M., Busse, M. and Schwarzwälder, J., 2015. Labour Mobility in Europe: An untapped resource?.

Beerepoot, N. and Hendriks, M., 2013. Employability of offshore service sector workers in the Philippines: opportunities for upward labour mobility or dead-end jobs?. Work, employment and society, 27(5), pp.823-841.

Boschma, R., Eriksson, R.H. and Lindgren, U., 2014. Labour market externalities and regional growth in Sweden: The importance of labour mobility between skill-related industries. Regional Studies, 48(10), pp.1669-1690.

Fratesi, U., 2014. The mobility of high-skilled workers–Causes and consequences.

Fries-Tersch, E., Tugran, T. and Bradley, H., 2016. 2016 Annual Report on intra-EU Labour Mobility. European Commission. Available at: https://ec. europa. eu/social/main. Jsp.

Huelser, S. and Heal, A., 2014. Moving freely?: labour mobility in ASEAN. ARTNeT policy brief; no. 40.

Krabel, S. and Flöther, C., 2014. Here today, gone tomorrow? Regional labour mobility of German university graduates. Regional Studies, 48(10), pp.1609-1627.

Miguelez, E. and Moreno, R., 2013. Do Labour Mobility and Technological Collaborations Foster Geographical Knowledge Diffusion? The Case of E uropean Regions. Growth and Change, 44(2), pp.321-354.

Taiwo, O., 2013. Employment choice and mobility in multi?sector labour markets: Theoretical model and evidence from Ghana. International Labour Review, 152(3-4), pp.469-492.