We all know that making profit is the most important goal for many industries. They need to achieve this to compete with other industries and to show their strength in the marketplace. For example, many manufacturers in developed countries look for a low cost labor force in order to make greater profits. How do they achieve that? Well, they simply move outside their home countries to other countries where they hire workers with low wages.
Take the example of the United States! It’s the perfect illustration of a more developed country where more and more American businesses manufacture their products and goods overseas, especially in Asia. You may wonder why such companies decide to move... The answer is obvious: American manufacturers prefer to move their businesses to less developed countries, where they can hire low-skilled workers for small wages compared to the wages they would have to pay US or European workers. For example, car companies (Ford, General Motor), food, and textiles such as jeans, are all American products that are manufactured overseas.
As long as globalization plays a prominent role in the competition to attract new industries or to retain existing ones, I believe that overseas countries will continue to attract more and more US manufacturers to move their businesses. Of course, more moved companies means a higher profit and more local hired people. This looks like a nice picture. But it’s not! The question that these manufacturers must ask is what happens to those displaced US workers? to answer this question, I will first invite you to consider the definition of what a displaced worker is: “Displaced workers are defined as persons 20 years of age and older who lost or left jobs because their plant or company closed or moved, there was insufficient work for them to do, or their position or shift was abolished.”
Joblessness is a direct consequence of this displacement. The Bureau of Labor Statistics of the U.S. Department of Labor reported in 2008 that “3.6 million workers were displaced from jobs they had held for at least 3 years between 2005 and 2007.” It’s therefore clear that when aiming to achieve less labor costs and bigger profits, those industries forget consider the economic and social impacts that they will cause to the displaced workers left behind, especially in the case of the low-skilled ones, who will have hard time finding a manufacturing job similar to the one they had. Isn’t it an alarming issue knowing that the US lost 20% of its manufacturing jobs during the first 6 years of the 21st century? Well, if you agree with me about the global seriousness of this situation, you should know that it does not seem to improve, taking into account the devastating impacts that the latest economic downturn had on the world workforce. But let us not be that pessimistic and hope that the moved industries will be more responsible and will take serious and fair measurements in favour of the displaced workers.
I think that providing unemployment assistance and training is the best way to help displaced workers find new jobs and improve their skills. I invite you to take a look at the video below, which illustrates training for displaced workers provided by Kansas Works at Barton Community College to improve their job skills after the closure of Great Bend Packing (a meat packing plant in Kansas, USA).
I believe that such projects are one essential way to prevent—or at least to reduce—the negative impacts such as poverty, depression and homelessness that displaced workers are most likely to suffer from.
Photo: © Simone D. McCourtie / World Bank