Friday, March 4, 2011

The Macallan Select Oak & How Globalisation Will Doom Us All - Excerpts from The Dog

The Macallan Select Oak

As I sit in my bat cave sipping on the delightful Macallan Select Oak (only available at duty free shops around the world), I cannot help but pontificate on an issue which is becoming a source of heated discussion among the elite in North Sydney:

The early decades of globalisation (which we are still in) has heralded many beneficial changes to the Australian way of life.

The shifting of basic manufacturing industries such as textile & clothing to relatively cheaper overseas countries such as China and outsourcing call centre functions to lower cost areas such as India has created great economic benefits for the majority of us through cheaper goods and services while eliminating only relatively few unskilled positions from the local employment pool.

Given the booming economic conditions partly created by globalisation, this small pool of unemployed workers have been able to retrain and gain employment in other industries – in other words, the workforce has largely been able to absorb the initial job losses caused by outsourcing and globalisation.

However we are now entering a period where it’s becoming possible to shift more and more skilled jobs overseas as technology makes it possible for say an accountant to be located in China but work for an Australian based operation. Again, there will be short term benefits to the Australian economy as company overhead costs reduce as a result of using cheaper overseas labour and the price of good and services fall further.

But the question is: as this rising tide of globalisation moves more and more jobs and industries away from Australia, will the country have the ability to keep retraining its population to work in fewer and fewer industries? One feels an economy needs to cater for the different skills, needs and abilities of its people by having a vast variety of employment opportunities in both skilled and unskilled areas, junior and senior roles. As an example, how can an individual who has not been to university yet performs perfectly adequately as retail assistant in Harvey Norman be expected to retrain as a mining engineer because that happens to be one of the few areas of job growth in Australia?

In addition, retraining comes at a heavy cost to the individual and society in general. Take the example of a banker with 15 years of experience who has steadily moved up the ranks in a world class domestic finance organisation and now enjoys a modest if not extravagant standard of living with a family to support and a mortgage. This banker relies on his current job to sustain this standard of living. If he becomes unemployed due to his company transferring his job to a cheaper overseas location, his standard of living automatically drops. He may have to sell his home as he can’t afford the mortgage repayments and return to university to study towards a new degree in a completely unrelated field. After three to four years of study, he then has to start a new career as a graduate with the commensurate income level. That’s if he’s lucky enough to find an enlightened employer who will be prepared to hire a mid 30’s aged graduate!

In summary, we all need to be aware that globalisation is effectively leading to an “averaging” process whereby the wealth and standard of living which we’ve accustomed to is being eroded through jobs and industries being exported to other parts of the world. Their win is our loss.

The Dog

Note from The Baron: For more vague nuances, dram-atisations, and plain weirdness this particular bottle of The Macallan Select Oak has imparted on us see C'est la vie - A Gentleman's Repose.