Impacts of Economic Globalisation in Australia since The 1980s

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Table of Contents

Introduction
Impacts of economic globalisation
Winners and losers
Conclusion
Reference List

Introduction

Economic globalisation surfaced in the field of social sciences in the early 1980s. During this period, people were skeptical about it, and thus no one believed that the world would one day acknowledge the role economic globalisation. However, by 2007, enough evidence pointed to the reality of economic globalisation, especially in the developed countries (Brady et al. 2008).

This aspect led to the emergence of numerous scholarly researches that sought to identify the impacts of economic globalisation not only to the developed states, but also to the developing countries. One of the impacts that economic globalisation has had in Australia is the growth in global trade and investment. It opened the Australian market to foreign investors leading to foreign companies establishing their operations in the country.

In addition, economic globalisation led to the end of Australia as a wage earners’ welfare state (Brady et al. 2008). The majority of workers in the country lost their jobs to foreign workers. Given that companies could hire staff from other countries, employees were unable to maintain their labour unions, which gave employers an opportunity to exploit their staff.

Overall, while employers have benefited from economic globalisation, workers have significantly suffered in the hands of employers. This paper discusses the impacts of economic globalisation in Australia since 1980s.

Impacts of economic globalisation

Since the 1980s, economic globalisation has had significant effects in affluent democracies, Australia being one of them. One of the significant impacts of economic globalisation in Australia has been the growth in global trade and investment. Ever since the onset of economic globalisation, Australia has seen numerous international investors coming to the country for business deals.

Currently, international companies from developed countries like the United States have their operation bases in Australia (Galligan et al. 2001). This move has facilitated in boosting the country’s economy and it has created numerous employment opportunities to thousands of Australians.

According to Castles (1985), economic globalisation has positive impacts that lead to expansion, negative influences that lead to reduction, and curvilinear impacts on the welfare of a state. One of the positive impacts that economic globalisation has had on the Australia’s welfare is that it triggered economic uncertainty and volatility thus forcing the government to come up with social policies aimed at stabilising the country’s economic security of Australians coupled with placating the public (Castles 1985).

Economic globalisation has facilitated in the mobility of capital across different countries, which has helped in the establishment of a healthy investment climate in Australia. Currently, Australia upholds a neoliberal approach as its economic management strategy.

The approach has helped the government to cut down on the rate of marginal corporate and personal income tax. In return, it has facilitated to improve the living standards of Australians since they now have enough money to spend for their needs.

Despite the fact that economic globalisation has facilitated in cutting down on the rate of income tax, it has pushed Australia out of the bracket of “wage earners’ welfare state”. Prior to economic globalisation, Australia had declared itself a “wage earners’ welfare state” with the aim of safeguarding the interests of its people as workers and not as citizens.

The country had numerous wage regulations and it resolved all the workplace conflicts through industrial arbitrations. In addition, all workers were assured of receiving minimum wages, which ensured that the country observed wage stability (Galligan et al. 2001). Besides wages, the country also offered other welfare services to the public like healthcare, housing, and childcare. By early 1980s, the Australian government embarked on restructuring the welfare of the state.

The government privatised and commoditised the welfare services. The government took away most entitlements and rights from the welfare recipients and bestowed numerous responsibilities on such people (Galligan et al. 2001). Those opposed to the restructuring process attributed the move to the emergence of economic globalisation (Craig & Porter 2003). Economic globalisation led to open global economy. Hence, proponents of the welfare state restructuring claimed that the wage earners’ welfare state was redundant and it served no purpose in the modern economy.

Therefore, to ensure that Australia attained global economic competitiveness, the government had to restructure its wage regulations and labour laws. The move led to social insecurity and intensified inequality; nevertheless, according to the proponents of the move, the restructuring was inevitable if the country were to achieve global economic competitiveness.

Kelsey (1999) posits that economic globalisation allowed Australia to realign its capital accumulation strategies as it sought to outdo other countries and attract mobile capital. The country did away with welfare and thus eroded wages. Today, Australia’s political economy is highly constrained by forces from the developed countries.

Therefore, to overcome this hurdle, “the Australian government bids for global capital through freeing labour coupled with other product markets, deregulating trade barriers, and promoting foreign direct investment” (Galligan et al. 2001, p. 112). Moreover, the country has commercialised the state sector and welfare, which have harmful impacts on social exclusion and equality.

Prior to economic globalisation, most manufacturing jobs in Australia were unionised. Nevertheless, economic globalisation forced these jobs to lose their union protection as they were outsourced to developing countries (Ganghof & Eccleston 2004). Today, most organisations operating in the service sector offer part-time instead of full-time jobs.

Employment opportunities have significantly changed thus forcing most Australians to venture into self-employment, retrain, or seek early retirement. The majority of the available jobs for new entrants and those re-entering the market have changed.

While very few entrants manage to secure permanent jobs in Australia, a majority of the new entrants end up securing part-time jobs, which are not under the protection of labour unions. Besides, most new entrants work under irregular schedules and are denied the benefits that come with formal employment (Ganghof & Eccleston 2004).

Since 1980s, economic globalisation has led to the polarisation of the labour markets in Australia. Currently, Australians classify the available jobs as either “good jobs” or “bad jobs” (McClelland 2006). In return, this aspect has led to the augmentation of wealth and income disparities in the country. In a bid to cope with inflation and increase in the living cost, Australian families are opting to look for two sources of income (McClelland 2006).

Economic globalisation has intensified the social welfare cost as well as poverty due to job insecurity and high level of unemployment, which has prompted the Australian government to look for measures to mitigate the negative effects of globalisation. Currently, the government determines families that are in dire need of social welfare and it has come up with programs aimed at helping Australians to secure jobs by encouraging them to retrain.

Even today, Australia is still struggling to overcome the numerous challenges posed by the ever-increasing economic globalisation. Some challenges that Australia is facing include integrity of its borders and global crimes. Globalisation has allowed numerous companies and industries to emerge in Australia. Besides, it has made it possible for people to cross borders and trade or work in Australia with limited restrictions.

Criminal networks have taken this opportunity to run illegal activities in Australia. For instance, due to the high demand of cheap labour in the country, criminal groups smuggle people to work in the country illegally. The advancement in international transportation and communication networks has made it hard for legal authorities to identify these criminal networks.

Today, there exist many illegal immigrants from Middle East and Western Asia in Australia (Castles 2002). The continued entrance of illegal immigrants in Australia has made it hard for the Australian government to protect its borders.

Apart from illegal immigrants, Australia has also encountered challenges in controlling numerous contraband products that come from other countries. Economic globalisation facilitated in the polarisation of the state borders by eliminating border restrictions in most countries thus making it possible for people from the different region to move freely from one country to another (Castles 2002).

In the process, it became hard for the law enforcers to control the entry of contraband products. Currently, illegal narcotics come from as far as the United States to Australia. Due to economic globalisation, countries agreed to come up with trade agreements as ways of promoting economic growth. Countries that were in trade agreements allowed their people to move from one member country to another.

Despite the fact that this move promotes trade, it poses a major threat in Australia today. As many people continue to visit Australia, the Australian government is now incapable of controlling certain diseases like the HIV/AIDS (Castles 2002). People visit countries prone to HIV/AIDS like South East Asia, contract the disease, and later move back to Australia where they spread the same.

Winners and losers

On evaluating the impacts of economic globalisation in Australia since 1980s, it is clear that some parties have gained from it while others have lost. The parties that have mainly benefited from economic globalisation are employers. Economic globalisation opened the global market to employers thus helping the manufacturing companies to sell their products in international markets.

Currently, many manufacturing companies in Australia enjoy their present success due to the availability of foreign market for their products (Genschel 2004). Prior to economic globalisation, these companies paid a lot of money to access global markets.

Besides, they had to abide by strict international regulations. Nonetheless, economic globalisation allowed most countries to do away with these regulations as a way of encouraging foreign direct investment coupled with promoting economic growth.

Besides the availability of foreign markets, employers have acquired cheap labour from other countries and this element has helped them to cut down on operational costs (Kelly 1992). Today, Australia companies are in a position to hire workers from different countries that offer their services at a cheaper cost relative to local workers.

Moreover, economic globalisation gave the manufacturing companies an opportunity to outsource part of their manufacturing processes. Currently, manufacturing companies in Australia outsource most of their manufacturing processes to Asian companies since they offer services at lower rates. In return, manufacturing companies enjoy high profits upon selling their finished products.

Australian workers have significantly lost due to economic globalisation. Most Australian workers lost their jobs to foreign workers who offer their services at low costs. Besides, economic globalisation has allowed Australia to abolish the welfare program. Unlike in the past where workers would receive minimum wages, today Australians have to work for the wages (Pusey 2003).

Most jobs that once offered full-time employment now offer part-time employment. Currently, most workers in Australia have to look for alternative sources of income to meet their increasing expenses. In addition, companies have undergone significant transformations, which have forced many employees to lose their jobs due to lack of skills. Other workers end up retraining in a bid to secure acceptance back into the companies.

Prior to economic globalisation, workers had labour unions that championed their interests and made sure that employers did not exploit them. Nevertheless, economic globalisation allowed companies to seek labour from other countries. Eventually, this move marked the end of labour unions (Pusey 2003).

Employees from different cultural backgrounds and countries could no longer come up with trade unions. Therefore, employers had an opportunity to exploit their staff through intimidation. Currently, most employees are unable to bargain for their employment terms for they fear losing the job. Hence, employers have the freedom to hire their staff according to their terms without having to consult anyone or any union.

Conclusion

Overall, economic globalisation has benefitted employers at the expense of employees. Employers have managed to recruit workers from other countries at low costs and sell their products in the global market with limited restrictions. Besides, companies are now capable of outsourcing their services to foreign institutions at cheap cost.

Prior to economic globalisation, Australia had a program that offered social welfare and wages to workers. Every worker was guaranteed of minimum wage. Nevertheless, economic globalisation allowed the government to abolish the program by claiming that it was outdated and it denied the country an opportunity to develop. Economic globalisation marked the beginning of the workers’ agony in Australia.

Most jobs that once offered full-time employment started offering part-time employment while organisational transformation forced many workers to lose their jobs. Globalisation did not spare the Australian government either (Pusey 2003); for instance, as people continued to migrate into Australia, the country’s borders became porous thus making it hard for the government to curb illegal immigration.

Besides, contraband products could gain their way into the country without the government noticing. Eventually, economic globalisation has made it hard for the Australian government to monitor its borders.

Reference List

Brady, D, Beckfield, J & Seeleib-Kaiser, M 2008, ‘Economic globalisation and the welfare state in affluent democracies, 1975-2001’, American Sociological Review, vol. 70 no. 6, pp. 921-948.

Castles, F 1985, The Working Class and Welfare: Welfare in Australia and New Zealand, Allen and Unwin, Wellington.

Castles, S 2002, ‘Migration and community formation under conditions of globalisation’, International Migration Review, vol. 36 no. 4, pp. 1143-1168.

Craig, D & Porter, D 2003, The Third Way and the Third World: Poverty Reduction and Social Inclusion in the Rise of ‘Inclusive’ Liberalism’, Auckland University of Technology, Auckland.

Galligan, B, Roberts, W & Trifiletti, G 2001, Australians and Globalisation: The Experience of two Centuries, Cambridge University Press, Cambridge.

Ganghof, S & Eccleston, R 2004, ‘Globalisation and the dilemmas of income taxation in Australia’, Australian Journal of Political Science, vol. 39 no. 3, pp. 519-534.

Genschel, P 2004, ‘Globalisation and the welfare state: a retrospective’, Journal of European Policy, vol. 11 no. 4, pp. 613-636.

Kelly, P 1992, The End of Certainty: The Story of the 1980s, Allen and Unwin, St Leonards NSW.

McClelland, A 2006, ‘Social policy responses to globalisation in Australia and New Zealand, 1980-2005’, Australian Journal of Political Science, vol. 41 no. 2, pp. 177- 191.

Pusey, M 2003, Experience of Middle Australia: The Dark Side of Economic Reform, Cambridge University Press, Melbourne.

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