labour

• movement of labour

  • the movement of low-skilled labour across borders for employment opportunities can also result in economic development of their home countries in terms of remittances 
  • eg. In 2023, remittances from overseas Filipino workers contributed to 7.7% of the gross national income of the country
• movement of highly-skilled labour (1)

  • better employment opportunities will sustain the variations in labour characteristics across the world
• movement of highly-skilled labour (2) NIDL

  • This will sustain the New International Division of Labour (NIDL)
  • NIDL: separation of production processes ind different parts of the world based on differences in skill and wages 
  • core areas continue to specialise in highly sophisticated production tasks. Management offices and research and development activity takes place in cities in economically developed countries and newly industrialised economies
  • Traditional manufacturing areas in these countries may be replaced by high value-added production by skilled labour
• • The periphery (periphery refers to economically less developed countries) begins industrial production based on standard technology and processes
  • Because of low barriers to entry, such production is characterised by its ‘footloose’ and transient nature, locating and relocating at will to seek out sources of cheap and docile labour 
  • In general, the industrial processes in periphery regions is comprised of low-value added production and assembly conducted by semi-skilled and unskilled labour, whether they reside in industrialised economies, NIEs or in economically less developed countries
• • Increase in commercial aircrafts and land and sea freight 
  • Air travel had become affordable and widely available after WW2, leading to an air travel network that could transfer various groups of people and time sensitive goods 
  • The adoption of standardised 20-foot long metal containers for land and sea freight after the 1950s vastly simplified the the transport and transhipment of a wide range of goods 
  • Today, over 15 million of containers are transported daily across sea and land, accounting for more than 90% of the world’s traded goods by value
• • Rapid urbanisation and high population growth rates in developing countries 
  • A large pool of available labour willing to engage work for cheap wages
  • To lower their production costs and maximise profits, many firms will shift their low-end production away from DCs to developing countries to take advantage of the cheap cost labour 
  • The labour in less developed countries are less adept in R&D compared to low-end production 
  • The opportunity cost of low-end production would be low (due to low value of agricultural products) so the comparative advantage is in production