Global labor arbitrage
What is global labour arbitrage?
Global labour arbitrage is an economic occurrence that happens when the barriers to international trade are weakened or removed, allowing jobs to move to nations where the cost of doing business or the wage paid to employees is less expensive.
Where have you heard about global labour arbitrage?
Global labour arbitrage also occurs in the instance of impoverished labourers moving to nations that pay a higher wage in most industries. Often an economically well off nation will totally eradicate its barriers to international trade, combining its own people with those from nations with a lower labour cost.
What you need to know about global labour arbitrage.
Global labour arbitrage comes in many shapes and sizes. Some of the most common forms are foreign outsourcing, immigration and the importation of foreign labour using work visas. Foreign outsourcing occurs when capital moves from one place to another because the place of relocation has fewer environmental regulations, lower production costs, or cheaper factory sites. This can result in certain people from the original place of business losing their jobs. When people emigrate from nations with poor wages to nations with more prosperous ones, this can cause the wages or jobs in certain industries to be cut.