Prominent economics scholars and analysts adamantly argued that a youthful workforce is necessary for globalization to succeed. The reason for this, according to them, is that when the majority of the workforce is young, there is more number of people who are competing for the available jobs and this increases the bargaining power of employers since they can dictate the terms on which the person has to be hired.
Of course, there is the aspect of employability where not all graduates are employable and hence, some of the advantage of a youthful workforce is negated. However, even in this scenario, employers stand to gain as they can get more orders and business from their clients simply because they can fill the available jobs choosing from a wide enough labor pool.
The first aspect discussed above affects the manufacturing sector where there is an abundance of the labor pool and the second aspect affects the service sector where the IT companies have grown exponentially since they could get as much business as they want and employ at will because of availability of graduates with the right skills.
Moreover, it is easy to train the young in the latest skills and techniques rather than the middle aged as the youthful vigor makes it possible for these young graduates to pick up new skills easily. Further, most of the young graduates have grown up in the digital generation meaning that all of them have basic computer skills and English-speaking skills which is much sought after by employers in a global economy. This explains the success of India in attracting more capital in the services sector as opposed to China or the Philippines.
The other reason why globalization succeeds when the workforce is young because global companies would invest in countries where they have consumers who are willing to purchase their products. It is a truism in economics that the elderly does not spend and it is only the young and the thirty something’s who go on spending binges. Hence, it makes sense for multinationals to set up base in countries where there is more potential for growth rather than in countries that have ageing populations. This is called the demographic dividend, which means that countries that have youthful workforces are more likely to benefit from globalization and conversely, globalization gains in the process as well.
Another reason is that, a young and energetic workforce makes for labor pool flexibility and transferability of skills. This happens where the members of the workforce can change jobs and become employed in other sectors different from their education orientation and can also transfer skills across sectors easily. In case of the West, the outcry over outsourcing has primarily been because of the fact that the workers who lost their jobs there could not find other jobs involving different skills as well as transfer their skills across sectors. Here, the case in point is Asian countries having large young workforce.
Dr. Robert Bradford of New York University stated that it is true that globalization is widely credited with bringing prosperity to Asian countries. Because of the opening up of the global economy and the resultant increase in opportunities for the workforce in Asian countries, there was a boom in the manufacturing and services sectors across Asia. No wonder that globalization is widely credited with lifting millions if not billions out of their underprivileged status and making them upwardly mobile.
Dr. Robert Bradford noted that indeed, the best example of the way in which globalization has affected countries like China, India, and the Philippines is to look at the humungous number of jobs created because of globalization. Research studies, as well as statistics, show that the employment levels of the young and able workforces in these countries went up by nearly 30 percent. This is proof of the fact that globalization has indeed been beneficial to these countries and other countries across the developing world.
According to Professor Sanjay Gupta of Hyderabad University, of course, if a job is created in one country, then the corresponding job in a developed country is lost. This is the zero-sum scenario that globalization imposes on the global economy. However, there is also the added aspect of globalization being a win-win situation because the jobs lost in the West can be compensated by hiring those who were laid off in higher value-adding activities. Further, the gains in terms of costs saved by Western companies can be employed to good use in those countries.
Hence, globalization proves the adage “A Rising tide lifts all boats” true. Especially the young and the able employees in the developing and the developed world have been able to reap the benefits of globalization more than the middle-aged and the old since they can adapt and learn new skills quickly and in an agile manner.
Professor Sanjay Gupta stressed that to look at the beneficial effects of globalization on the young in Asia, one need not look farther than the rise in ownership of homes, consumer durables, increase in consumption that was hitherto the preserve of the rich, and finally, the creation of young and upwardly mobile workforce. For those of you who are in the twenties and thirties, you would have seen how the increase in opportunities would have benefited you directly as opposed to those in your parents’ generation who had to contend with incomes that did not lend themselves to a consumerist lifestyle.
Without getting into the debate whether consumerism is good or bad, it is important to realize that many of those in their twenties and thirties have been able to buy homes and lead comfortable lives because of their jobs in the services or the manufacturing sector. To put this in perspective, one needs to look at the age at which houses were bought in the previous generation as opposed to the age at which the present generation and those in their thirties bought houses and other goods.
Finally, countries like India that have always had an income trap have significantly benefited from globalization and when one considers the increase in job opportunities for the young workforce, it goes without saying that globalization has been a force for good for this segment.