Changes in overseas demand, competition or the location of operations can threaten jobs and make existing skills harder to use.
A company moves its reservation service to an overseas office. Staff at the original location lose those roles even though they performed their work well. Losing a job because the employer removes the role is retrenchment. A change in business organisation can alter which jobs are available.
International competition can put pressure on firms to cut costs or change what they produce. Companies may move activities abroad to manage costs, reach markets or access skills. Falling overseas demand can also reduce working hours, wages or jobs in businesses that depend on it. Fewer paid hours can reduce weekly earnings even if pay per hour stays unchanged.
New roles may require different skills from those being lost. Workers may need time, training and support to move into them, and some cannot relocate because of family, health or financial constraints. Losing a job does not by itself show a lack of effort.
Technology can also change work, but not every automated task or domestic job loss is caused by globalisation. Identify the actual cross-border demand, competition or relocation link in the case.
Worked example: The reservation team moves
A travel company combines several countries' reservation teams in one regional office abroad. Its Singapore reservation office closes. Lina has strong customer-service experience but cannot move overseas because she cares for a family member.
- The company reorganises its operations across countries, removing Lina's local role. This is a direct link between international business decisions and employment insecurity.
- Her experience remains useful, but it does not create a vacancy nearby or remove her caring responsibilities.
- Finding another role may require job-search support or additional skills. It is not reasonable to assume she can simply relocate or that the job loss proves poor performance.
Watch out for this
Workers who lose jobs in a globalised economy must have refused to adapt.
Jobs can disappear because of demand changes or company decisions. Skills matter, but so do vacancies, access to training, caring duties and the ability to move.
Check your understanding
A report says a local restaurant replaces one repetitive task with a machine. It gives no information about foreign competition, overseas operations or cross-border demand. What can you conclude about globalisation?
- Every use of a machine proves globalisation caused a job loss.
- The affected worker must be unwilling to learn.
- The report shows a technological change, but more evidence is needed to attribute it to globalisation.