Wirtschaftswetter       Banner Wirtschaftswetter-International, Link Wirtschaftswetter-Werbung

Import workers or export jobs

Experiencing the Shift

by Ines Kistenbrügger

Synopsis

Growing up in a small village close to Hamburg Germany from 1974 to 1994 I learned that jobs are not scarce. Benefits and other job securities were self explanatory when applying for jobs. However, when I started to develop my own career as a chemical engineer I learned differently.
During the 90s the job situation in Germany changed. Not only a decent education in your field of study, but also languages, cultural experiences, and the willingness to travel became beneficial skills when applying for a job.

In 1998 I, therefore, moved to Cape Town in South Africa in order to finish my degree as a chemical engineer. What was thought of as being only an opportunity to meet different people, to improve my language skills, and to help me completing my degree, actually changed my attitude towards life. It became obvious to me that benefits and job securities as known in Germany are not the rule, but an exception in the world.
When back I worked for the automotive industry. Finally the weakening economy hit Germany. Outsourcing was seen as a solution to follow a low cost strategy. When US, German, and other European Subsidiaries of my organization finally were milked, reinvestment only done sporadically, and employee motivation went down, I decided to leave and improve my career perspective through continuing my education. I realized that the equilibrium in the job market is changing due to continuing globalization. Jobs follow the same rules of supply and demand as any other product in the market. Benefits as part of the social responsibility would shift from companies back to the employees themselves. In the competing world market employees are seen as liabilities whose cost need to be reduced.

Experiencing the Shift

When I was really young – it seems only like days ago - I considered jobs as something someone must do during the day to get money. Money was important somehow, because everyone always needed to pay for something in stores. My parents taught me early about the importance of money. Money as the result of working. No money without effort. That is still what I believe today. Everything else changed.
I took jobs for granted, because everybody in my family worked. My father, my mother, my uncles and aunts. Blaming the status of the economy, or politics for the unemployment was never heard. A common saying was: Who wants to work will find work. My family never moved in order to get another job. We always lived where we lived. The small little village close to Hamburg in Germany. People grew up, worked and died there. I lived there from 1974 to 1994. Then I left.
As a child I never actually knew someone moving because of a job. Moving to another country was out of the question anyway. I never traveled as a child. We did not have the money to travel much. We were happy without travelling. My parents worked and the job benefits were just so obvious: 6 weeks paid vacation, health insurance, paid sick leave.

My parents never went to college. A high education was just not part their lives. All you needed for your own personal happiness was working and the one or other beer with friends during the evenings. Friendship was also important at work. I remember my father’s boss sending me Christmas and birthday presents. And we were always invited to birthdays and anniversaries at their house. As the owner of a small company you cared for your employers and were responsible for their well-being.
Things changed for me when I started learning languages at school. This made me want to travel, to move, to live elsewhere. I began to continuously seek for new challenges. Went to France and England all by myself. Other than my parents, I wanted to go to University to get a high paid job that would allow me to experience the world even more. Was it just me or was I just following a new trend?

I became a chemical engineering student. Soon I learned the apparent in the mid-90s: Languages are important because of globalization. World wide communication skills were new sought skills of many global operating companies. The flexibility to move became a requirement. Experience in living in another country was the not so secret winning card when looking for a job.
In 1998 I moved to Cape Town in South Africa in order to complete my engineering degree. What was thought of as being only an opportunity to meet different people, to improve my language skills, and to help me completing my degree, actually changed my attitude towards life.
I saw the discrepancy between poor and rich of the South African population. I saw extraordinary poor black people creating jobs out of nowhere and with nothing but the will to get to the next day. Selling their willingness to survive to the upper class. No pride. No question for benefits or career perspectives. Simply the wish to survive another day. I saw rich white people complain and being afraid. Their fear to lose their status, their fear to lose their jobs to the Blacks because of the new integration politics. Their fear was new to me, it seemed weird.
However, it became obvious to me that benefits and job securities as known in Germany are not the rule, but an exception in the world.

Back to Germany I got my first job in an international operating organization at the Rhine, an automotive supplier. By the end of the 90s earning lots of money was granted as an engineer, jobs were blossoming everywhere, so I chose the job that suited me best. However, things changed, the economy slowed down. Germans complained about losing their job benefits, losing their job security. Nothing was secure. The economy was up and went down. We, as the organization, needed to save money. We bought supplies from other countries, because they would deliver cheaper. We opened production sites in low wage countries in order to save employment cost and to produce at lower cost. Increasing business at low cost was our strategy. Things changed continuously. Salary and wage raises became rare. Promotions were not granted as often. We changed the CEO. The old CEO had an operating background. The new CEO a degree in Financing. Soon rumors spread around the offices that temporary workers would be fired. Fewer training sessions, less business travels, no overtime pay granted. German jobs were expensive.

If I remembered my father drinking a beer with his boss and chatting about the firm’s future, this picture would not fit into that organization. In my company nobody talked about the future. Strategic plans were top secret. Talking money other than reducing costs was a guarantee for suspicion and weird looks from management. I traveled a lot throughout Europe and the US. Business Trips. The US and the European subsidiaries were milked. No unnecessary expenses. Machinery got old. Replacements? Only in rare occasions. How much earnings does a company need to reinvest in order to keep running and be highly competitive? Is exporting jobs to low wage countries the last resort to keep costs down? Investing in new markets like China the only way to create new sources of money? Staying with what has been done always and expand it to other countries, but leaving innovation behind?

I left the company in August 2003. I went to the US in order to get my MBA. I needed to get an improved career perspective. With regards to the current overflow of high educated people in the market, I needed to differentiate myself by becoming more educated and even more experienced. Your ability to work with all the skills is a product that needs to be sold.

Considering my professional experience and my new field of study “Business”, I was able to better understand what happens in the job market. But it also left me with loads of questions. Has not there been this analysis by Geishecker and Görg proving that outsourcing has already widened the gap between rich and poor? Lower paid workers are now getting even less, while highly paid workers do have more money. This just happened because low paid jobs left the country?

What would happen if other – higher paid - jobs became open worldwide? Another increase in the gap between rich and poor? A reduction of the middle class?

How do people like me answer to that trend? We are the middle class used to a high standard in work conditions and benefits that become more anachronistic every minute. Are benefits and job securities anachronistic? Are we still dealing with the same old story Keynes and Friedman fought about? Do we need a world government to regulate the world job market or will it regulate itself. Can we trust the “natural” forces of the market to create a healthy equilibrium between job demand and supply? Even if standards and ideas on wages and benefits vary from country to country? Do employees and workers actually request these benefits in exchange for their work in the long run? Do they have the power to negotiate or is it just a question of survival?

Do we still have to hold on to the theory of the social contract Rousseau talked about? Is this contract meaningless since there is no common understanding of the expression “social responsibility”? With unsolved poverty issues, increasing pollution and decreasing resources we should have enough reasons to consider the ethical dilemmas behind the globalization of the job market. However, ethical issues fall behind. It is a Faustian bargain, consumers want cheap products, companies need to reduce costs to offer these low prices, employees will therefore earn less money to help companies with their low cost strategies. Or is just the greed of those shareholders expecting to make big money with low effort to blame?
A conclusion might be: With the world seeking for a new equilibrium in the job market continuously more social responsibility is left with the employees.

What has changed from my childhood? Employers are not responsible for their employees well-being anymore, they only have to pay the requested job price. If the job supply is high the price needs to be reduced to sell. If supply is low the price can be set higher. Economy at its purest. With all these new people on the market place willing to work for less, it becomes obvious that a shift is to be expected. If people can be hired elsewhere for less, why not move production to another country? If people are willing to work for less in our high industrialized countries, why not import them? Workers at home with their anachronistic attitude towards their jobs have become unbearably expensive. A company losing the competitiveness in the market will not make any money. Cost reduction everywhere.
You want to keep your job? Make some sacrifices. Do you really need health insurance and vacation? Buy your own insurance policy and help your company compete and succeed. This is good for the economy. A good economy is good for your standard of living.

The equilibrium in the job market is changing. Accepting the change might be hard. It is not only about the money per se, it is also about the sacrifices people are willing to make. A shift in social responsibility from companies back to the people themselves. Likely that only the ones drawing the strings might actually benefit from that change in monetary terms.
For me this means I have to tell that German small town girl, that is still inside me, one thing: It is not a question whether the change is good or not, for us - the new generation in place- it is a question of changing the attitude towards work.

Ref.: Geishecker, DIW Berlin, and Görg, University of Nottingham, International Outsourcing: Winners and Loosers, March 2004


2003-10-15 Ines Kistenbrügger
aritcle © Ines Kistenbrügger

back to: International 

Wirtschaftswetter

contact: international@wirtschaftswetter.de
©2003-2017 Online-Magazine Wirtschaftswetter