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From United Nations University

23. TNCs and Employment
24. TNCSs and Wages and Training


23.1 Employment objectives
    a) government objectives
      i) full and productive employment
     ii) an up-grading in the quality of the work force
         through training and learning of new skills
    iii) minimise the costs of manpower adjustment brought
         about by structural et al change

    b) TNC direct effects:
      i) job creation, structure of employment, training, work
         systems, redeployment
     ii) on the capital/labour ratio
         These effects will vary according to country, industry
         and firm specific characteristics; and whether the entry
         of the TNC takes the form of an acquisition or is a green
         field venture. They will also vary according to the
         assumptions made about what will have occurred in the
         absence of TNC activity i.e. what are its opportunity

    c) TNC indirect effects
      i) vertical, horizontal and lateral linkages (do TNC
         affiliates buy more or less inputs from local sources
         than do indigeneous firms?) (see also 25)
     ii) government tax revenue
    iii) income distribution
     iv) possible brain drain
      v) entrepreneurial capacity
     vi) employment displacement by TNCs

    d) the determinants of the effects of TNCs on employment
       objectives of host governments e.g. which kinds of TNCs are
       likely to have the most/least beneficial impact on
       employment? What are likely to be the main country and
       industry specific variables?

23.2 government policy options
    a) alter the price-ratio of inputs to encourage foreign
       affiliates to make more use of labour and less of capital

    b) steer affiliates towards the production of labour intensive
       products or to produce in regions of above average

    c) encourage affiliates to be more fully integrated in the
       local economy (see also 25)

    d) encourage affiliates to engage in activities requiring more
       highly skilled labour

    e) improve bargaining power to increase share of the economic
       rents from TNCs affiliate activity

    f) address existing unequal income distribution and the effects
       this may have on product and technology selection

    g) support organised labour to negotiate more effectively 
       with TNCs

    h) improve educational and vocational training infrastructure;
       and foster in-house training in TNCs and local firms (see 24)

    i) reduce protectionism

    j) target production to job creating industries

    Note that some of these options conflict with each other; and may
    have some kind of cost (e.g. to efficiency, or balance of payment
    goals) attached to them

23.3 a home country perspective


24. TNCSs and Wages and Training

24.1 Wages and working conditions
    a) objectives of unionized labour
      i) maximize earnings
     ii) optimise working conditions
    iii) secure stable employment
     iv) participate in and/or influence management decision

    b) a review of the evidence of the extent to which TNCs promote
       or inhibit these goals

    c) the labour aristocracy thesis (Arrighi 1970)

24.2 TNCs and organised labour
    a) expressed concerns about TNCs
      i) foreign influence
     ii) company size
    iii) global strategy
     iv) lack of full information (nb especially the Vdredling
         proposals Van Den Bulke(1984) and Haworth and Ramsey(1986))
      v) ability of TNCs to relocate activities in areas where unions
         are non existent or weak

    b) transnational union experience

24.3 multilateral policies: different themes
    a) evolving guidelines and codes of behaviour in the field of
       industrial relations by TNCs in host countries

    b) considering using TNCs as a beach-head for the introduction
       of improved working conditions in host countries

    c) establishing an international social fund out of which the
       adjustment assistance necessary to offset the adverse 
       employment affects of TNCs might be financed

    d) persuading governments, where labour is not organised, to
       allow protective action by labour

    e) seeking ways and means of encouraging TNCs to provide more
       information about their activities; the Vredling Directive

    f) the effectiveness of OECD guidelines in influencing TNC
       labour practices in Europe (Blanpain(1983))

24.4 TNCs and training
    a) to what extent and under what circumstances are TNCs likely
       to train or upgrade their employees?

    b) how does the record of TNCs compare with non-TNCs

    c) what are the constraints to a)?

    d) what should the host governments contribution and policy be
       towards the education and training programmes of TNCs,
       and/or of the programmes of indigeneous firms in the light
       of (or in place of) the presence of TNCs?
Vaitsos(1980) Meller and Mizala(1982) Goncalves(1986)
Possas et al(1987) Bailey, Parissoto and Renshaw eds.(1993)
See Bibliography
--RRojas Research Unit/1996