Parameters for Global Employment Model

I. Scope

1. Objective

  1. To prepare a major report providing theoretical perspectives and quantitative evidence establishing the urgent necessity, potential and strategies for achieving full employment nationally and globally.
  2. To identify the factors and processes impacting on the growth of employment opportunities in today’s increasingly globalized labor market which can serve as the basis for formulation of a quantitative model of global employment.
  3. To identify key policies and strategies that can have a determinative impact on global employment generation.

2. Questions

  1. Is there a theoretical framework that can adequately explain the phenomenal growth in employment opportunities that occurred globally during the latter half of the 20th century?
  2. How far will such a model be adequate to explain the likely evolution of global labor markets over the next 25 years?
  3. Is global full employment an achievable goal?
  4. What set of strategies and policies will optimize the welfare of all human beings globally?

II. Factors Impact Global Employment

1. Employment

  1. Trends
    • Transformation of work: from agriculture to manufacturing to services
    • Increase in quality of jobs
    • Higher educational requirements
    • Impact of economic growth on employment
    • Impact on globalization of trade and outsourcing
    • International labor mobility
    • Labor policies
    • Public policies most likely to affect levels of employment
    • Entrepreneurship
    • Self-employment
    • Job exchanges
    • Virtual work
    • Job programs
  2. Issues
    • What factors have driven the growth of employment over the past century?
      1. How did employment keep pace with population during a period of peak population growth from 1950 to 2000?
      2. What factors account for the four-fold increase in employment in USA during the 20th Century under conditions of rapid technological development and globalization?
    • How are these factors likely to impact employment over the next few decades?
    • How valid are the assumptions underlying current economic and technological models of employment?
    • What is the role of non-economic factors such as law, democratization, education, social organization, innovation in a comprehensive model of employment?
    • Which public policies can have maximum impact on total employment generation nationally and globally?
    • Social value added of labor

2. Demography

  1. Trends
    • Employment growth relative to population and labor market growth since 1950
    • Impact of rising population in developing countries on global economic demand
    • Labor market growth in developing countries increases labor supply
    • Aging of the population in OECD increases the elderly pop will reduce the relative size of the total labor force
    • Greater longevity will push retirement ages higher
    • Labor shortages are projected in some economically advanced countries
    • Urbanization
    • Migration of workers from developing to developed nations
    • Potential impact of international labor policies such as minimum wage
  2. Projected change in working age population by region 2010-2050
  3. Aging Population and Shortage of Workers
    • UN Population Division estimates that the 47 nations of Europe would have to admit 161 million migrants during the period 2005-2050 in order to prevent the decline of the working age from 2005 levels, a net average of 3.6 million migrants per year during those 45 years.37
    • A World Bank Study in 2003 estimated that 68 million immigrants will be needed to meet Europe’s labor requirements during the period from 2003-2050.38
    • Prior to the financial crisis, studies forecast that the US would have a shortage of 17 million working age people by 2020 and that China will be short of 10 million.40
  4. Issues
    • What will be the impact of aging on labor markets? Where will it create shortages and to what extent? How are shortages likely to be filled?
    • What will be the impact of aging on retirement age? How will society harness the capabilities of more experienced older workers who wish to continue working?
    • What will be the economic impact on a declining percentage of working age population on pension and welfare systems?
    • How will worker sex ratios change? What factors will most affect them?

3. Economic growth & Employment

  1. Trends
    • Projected global economic growth rates and their impact on total employment
    • Rising living standards in emerging markets will create enormous demand in future
    • “Growth related Job Exports” – assessing the jobs created overseas from growth of domestic GDP
    • Impact of growth of tourism, medical tourism generate jobs in all regions
  2. Issues
    • What will be the relative contribution of financial capital, technology and human capital to future economic growth?
    • Income and Employment Multiplier Effects
    • Impact of tradeoffs between technology and labor, e.g. farm employment
    • Relationship between economic growth and domestic and international job creation
      1. Shift of production overseas depresses economic growth for the lower classes in the West

4. Globalization of Markets

  1. Trends
    • Growth of manufacturing trade since 1990 shifts jobs internationally
    • Outsourcing of services shifts jobs to developing countries
    • Globalization of Labor Markets/Flows/Labor mobility
    • Effects of the unification of the EU market on employment may be obscured by other factors
  2. Issues
    • To what extent can global markets be regulated nationally or internationally?
    • What are the crucial regulatory decisions that would have maximum impact on employment?


  1. Trends
    • Globalization of financial markets
    • Growing divorce between finance and economy
    • Rising unutilized international financial reserves
    • International capital investment flows
    • Interest rates
    • Currency stability and valuation
  2. Issues
    • The role of money and capital and its impact on employment
    • What is the public good impact of financial markets
    • The huge cost of global financial instability is not being priced – the public is paying for instability and the right to speculate
      1. Bailouts
      2. Instability reduces long term productive investments
      3. Need for huge unproductive foreign exchange reserves
      4. Potential impact of policies to reduce non-productive investment and incentivize productive investments, e.g. Tobin Tax
    • Impact of incestuous relationship between major corporations and investment funds on corporate decisions, including employment

6. Human Capital Formation

  1. Definitions
  2. Trends in its development
  3. Multiplier effect of human capital formation on economic growth and employment
  4. Impact of underemployment and unemployment on Human Capital
  5. Financial capital vs. human capital
  6. Investment trends in HCF

7. Education

  1. International educational trends
    • Levels of education are rising dramatically worldwide, e.g. Korea, China
    • Impact if education on employability
    • Relationship between education, employment and unemployment.
    • Relationship between education and income
    • Trends in labor market educational requirements
    • Impact of rising levels of education on aspirations, consumption patterns and effective demand
    • Current and projected trends in educated unemployment in developing and industrialized countries – long and short term
    • Life-long learning
  2. Issues
    • Educational curriculum and employability
      1. Firewall between universities and labor market in Europe
      2. Why MBAs are more employable?
    • Accountability of universities
  3. Education and immigration
    • Asians in US universities and hospitals

8. Skills shortage

  1. Trends
    • Emerging skill shortages and skill mismatches in industrialized and developing countries
    • Projecting future skill needs
    • Trends in vocational education and training
  2. Issues
    • Alternative training delivery systems
    • Education, apprenticeship, employment programs

9. Business Strategy

  1. Trends
    • Globalization of sourcing and distribution systems
    • Globalization of business ownership
    • Globalization of MNC employment strategies
    • Shift of capital investment to growth markets and low wage producers
    • Shift of production to low wage countries
    • Shift of production to fast developing markets
      1. Outsourcing of services
  2. Issues
    • Reduced effectiveness of national level policies on business

10. Technology

  1. Trends
    • Dissemination of new products and technologies at all time high
      1. cell phone, smart phone, notebook computers
    • Rate of process and product innovation more rapid than before 
    • Impact of process and new product development on employment in manufacturing and services
    • Factors influencing the substitution of capital and technology for labor
  2. Issues
    • Attitudes, policies and business strategies impacting investment in technology

11. Ecology

  1. Trends
    • Energy prices and their impact on employment vs. capital investment
    • Pressure to change technological base from fossil fuels creates problems and opportunities
    • Pressure to improve energy consumption at a time of rapid economic growth

12. Getting prices right

  1. Pricing labor and capital
    • Are we pricing capital correctly?
    • Pricing to reflect the actual cost of unemployment
    • Policies to get prices aligned
  2. Pricing of resources
    • Distinguish between extracting cost and ecological value of different resources
      1. Timber
    • Assigning ecological cost of water will dramatically change agricultural and other prices

13. Social Costs of Unemployment and Underemployment

  1. Impact on human capital
  2. Impact on social capital – neighborhoods, community
  3. Impact on social unrest, crime, violence, peace and stability

14. Emerging economic opportunities

  1. Trends
    • Historical analysis of the impact of new needs, products and services on employment
    • Project future profile of new services and job requirements in developing and developed countries
    • Factors influencing new business development
    • Scope for less developed nations to adopt services prevalent in economically advanced nations
  2. High Potential Industries
    • Insurance as a driver – positive causal impact on economic growth

15. Evolution of Social Organization

  1. Impact of social organization on new business opportunities
  2. Future impact of the Internet on the way work is carried out

16. Social Development and Macro psychology

  1. Impact of changing social attitudes on growth and employment
    • E.g. rising confidence in Ireland due to entry into EU, pop music
  2. Trust deficits – their causes and remedies
  3. Impact of trust on social development, economic growth and employment
    • Mechanisms to enhance trust
  4. Potential role of new types of insurance to promote trust, security and development

17. Public Policy

  1. Trends
    • Public Sector as a major part of the economy
    • Policies regulating new job creation
    • Policies restricting entrepreneurial activity and employment
    • Public investment in stimulus
    • Welfare and social security
    • Employer of last resort programs
      1. Civilian Conservation Corp – the new New Deal
      2. India’s National Rural Employment Scheme
      3. Randall Wray on programs in USA, Argentina and other countries
    • Guaranteed basic income – 4 Pillars
  2. Issues
    • Need for political economic theory that reflects the large role of government in economy
    • Reconciling free markets with public good
    • Vested interests of financial markets and investors impacting employment policies
    • Public investment to crowd in private insurance, e.g. New Orleans
    • Reliance on classical macroeconomic strategies to address employment

18. Law, Human Rights & employment

  1. Law and Human rights
    • Property rights vs. the right to work
  2. The value of human security
    • The challenge of food security is really about ensuring access to employment opportunities.
  3. Social attitudes toward unemployment