Employment
Articles on Labor,Employment,Wages and Outsourcing
March 25, 2013
Global Unemployment The phenomenon of growing unemployment across the world has become a regular feature across daily news stories. This is not restricted to one nation […]
March 12, 2013
International Business After globalization becoming the buzzword in today’s world, international business has given a new shape and has also created a new dimension in the […]
March 11, 2013
Medium to Small Enterprises, MSME India India is a developing economy which can be characterized by the following salient features: Low per Capita Income Rapid population […]
March 6, 2013
Foreign Trade Policy – What Foreign Trade Policy in India is formulated by the Government of India, Minister of Commerce and Industry, Department of Commerce. Foreign […]
February 5, 2013
Foreign Trade Foreign trade is nothing but trade between the different countries of the world. It is also called as International trade, External trade or Inter-Regional […]
December 6, 2012
Among fast growing developing countries, India is distinctive for the role of the service sector. Where earlier developers grew by exporting labor-intensive manufactures, India has relied […]
December 1, 2012
What is a “Sole Proprietorship”? It is a simple type of business structure that is owned and operated by the same person and thus does not […]
May 14, 2012
Globalization refers to the increase in international trade & commerce amongst the different countries, through the reduction of geographic barriers. With the rapid innovation of smart […]
February 14, 2012
The relentless rise of Chinese telecom equipment and OEM companies has massacared telecom jobs in the West with major companies like Nokia, Alcatel and others firing in the thousands. Note Huawei and ZTE have become the nemisis of the telecom equipment makers which are showing losses in the last few years. These companies are not managing to compete with the low cost engineer advantage of the Chinese firms . Nokia is also firing thousands in its western factories in Poland and other places as it moves production to Asian factories. Note while Nokia has become unprofitable to other causes like Apple and Android, low cost phones from Asia is the biggest factor in its demise as well.
February 7, 2012
Global Stock Brokers across continents are either firing hundreds of workers or are totally closing down. The reasons for this downsizing of operations by brokerages is
a) The Financial Industry has become too large to the size of the global economy particuarly in countries like USA
b) The reduction in risk and capital means that big financial companies are reducing and selling their operations
c) The Broking Sector has seen a Peak in 2008 and now the only place to go for the next few years is Down
February 2, 2012
Apple recently reported astounding financial results in which profits grew by an awe inspiring 50% on a huge basis with Net Profits Margin of 30% which is crazy for a company of Apple's size. It generates massive cash flows and has over $100 billion in its cash war chest. While there are a number of reasons which makes Apple one of the most successful and profitable companies in world history, the global oversupply of labor is one of the chief reasons which is overlooked at .
January 12, 2012
The Financial Industry will shed another 150,000 jobs according to Richard Bove, an analyst at Rochdale Securities LLC . Royal Bank of Scotland the bankrupt UK bank that was taken over the British government is going to kill a number of investment banking divisions and will fire 3500 people. RBS has already fired thousand before in wholesale and corporate banking . Now RBS will completely exit from a number of divisions like M&A, Cash Equities etc. which will mean thousands of firings . In an environment when financial jobs are scarce , this means that the fired thousands will have a tough time getting into the workforce again.RBS is going to fire 3500 people in addition to 2000 already announced. This would bring down the 24,000 pre crisis headcount by almost 45% .
January 7, 2012
Financial Jobs are being let go in the tens of thousands by European and USA Financial Institutions. The Financial Industry has become too huge as a percentage of the global economy with any value creation to say something like the IT industry. The share of the market cap of the stock market had become too high during the boom boom years of 2008 and it is continuing to go down.Despite the best (some would say the worst) effort of the governments to prop up the Too Big to Fail Banks,jobs are being let go as there is not enough work. European Banks are shrinking their balance sheets as they are too leveraged and insolvent. Without the ECB crutch,almost all of them would go under.
June 30, 2011
China has increased the tax exemption limits for urban workers by 80% to $540 a month as soaring inflation and rising income inequalities has reached dangerous levels.Note increasing corruption and vast income inequalities have led to increasing incidences of violence and riots in the country.The prices of essential commodities like food and fuel have been increasing rapidly like in the rest of the developing world.Despite the central bank increasing interest rates,the prices have hardly moderated.Pork prices have touched new records making the life of the poorest quite unbearable.Note Gini's coefficient in China has reached 0.47 which is very high.While economic prosperity has increased,a vast section of the population remains poor.This is apparent in the fact that only 24 million workers out of 300 million urban workers earn more than $6500 per year .
April 16, 2011
Labor Cost Arbitrage is the biggest reason for the growth of the Indian outsourcing industry.The outsourcing revolution in India which started though technology outsourcing has spread to the legal,medical and other fields as well.Medical Billing,Coding and Transcription has become a big business besides Legal Outsourcing of work.Globalization of finance and trade has been much more rapid than the globalization of labor which faces many hurdles.The spread of Internet and improvement in Communications has made this hurdle moot as many high cost services in India are being performed virtually over the Internet.However this arbitrage which has bought billions in profits to global corporations and rise of new companies such as Infosys,TCS and others is disappearing.Rising Wage Inflation in India caused by a multitude of factors including the Bernanke Money Printing has led to shrinking of the margins.
October 26, 2010
Vestas employs over 8000 people in Denmark which is its home base out of the 22000 employees worldwide.The comppany now plans to fire 3000 workers mostly from Denmark even as it hires workers in places like India and UK.Vestas has to cut a lot of flab as Chinese companies destroy higher priced competition in the Wind Energy Industry.Like the Solar Industry,where European companies like Q-Cells and Solarworld are facing an existential crisis from low cost Chinese competition ,Wind Energy now faces similar dynamics.Like Q-Cells and REC which relocated their manufacturing to Asia,Vestas has to do a similar act.Despite a record order book of 6.5 GW in Q310,Vestas has to fire Danish workers who are more than 10x more expensive than similar Asian workers.In a globalized world,companies don't have the luxury of employing expensive workers in developed countries if similar wokers can be employed elsewhere.Note competition is increasing in Wind Energy with big players like Hyundai,Samsung,Northrop and smaller players entering the industry.
September 8, 2010
Increasing College Education in Developing Countries has led to Unemployement and Low Wages for White Collar Workers.The increasing number of people armed with College Degrees has […]
September 5, 2010
.Europe and UK remain in equally difficult conditions suffering to some extent from the debt induced overhang.Hong Kong and the rest of Asia in comparison have escaped relatively unscathed and countries in the region have resumed their strong growth trajectory.Its not a wonder then that global talent is looking at Asia for newer growth opportunities.Non-Resident Indians are migrating back to their homeland in record numbers to take advantage of the booming economy.Its the same in case of other Asian centres like Singapore,Hong Kong and Shanghai.Asian companies are now raising money from capital markets in HK rather than NY.
August 10, 2010
The new law will impose a $2000 annual via fee for companies with more than 50% of its employees in the US who are working on visas.The law is specifically targeted at Indian IT companies from the letter and spirit of the law.It remains to be seen how this affects the growing closeness in India-USA relations.Though India has shown maturity by not coming out with a sharp retaliatory action,it will sour relations.
July 29, 2010
Bangladesh recently witnessed violent protests by textile workers who are being forced to work for wages below $1/day even as inflation rages at more than 10% […]
July 18, 2010
USA is unarguably the world’s richest and most powerful country after the fall of the Soviet Union in the 1980s.The country is the only superpower left […]
July 17, 2010
India’s Mahatma Gandhi National Rural Employment Guarantee Scheme or MGNREGA as it is popularly known is leading to labor shortages around the country.The NREGA scheme which […]
July 17, 2010
The Global Financial Crisis is truly global in its character of inflicting misery and impoverishment amongst workers.Bangladesh and US which are two highly disparate countries in […]
June 22, 2010
Bangladesh is one of the world’s poorest countries with a high population density.Carved out of erstwhile Pakistan,this predominantly Muslim country faces huge poverty like other countries […]
June 17, 2010
Labor shortage and improved opportunities for workers driving up wages China’s massive manufacturing base near the Eastern coast has been driven by cheap migrant labor from […]
May 30, 2010
The spectacular growth in Asian economies like China,South Korea,HK,Taiwan over the last two decades has raised millions from poverty to a middle class life.This has led […]
May 18, 2010
The EU bazooka which led to a massive short covering rally has fizzled out with the Euro below the level that it one week ago.However I […]
May 16, 2010
One of my theories is that a lot of distortions and opportunities for arbitrage that we are seeing in the world today is because “Labor is […]
May 1, 2010
One of my pet theories is that they we see a lot of distortions and oppurtunities for arbitrage is because labor is not globalized while capital […]