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#10 - Workers threatened by globalisation need support, not protectionism
The effect of international trade on employment is widely debated. Although the overall effect on economic growth is expected to be positive, some forms of employment may be affected negatively. However, recourse to protectionism “to bring back jobs” is not a solution as the number of jobs put at risk will outnumber those directly protected and cause economic damage. When it comes to international supply chains, there will be a negative impact on downstream and exporting industries. Protectionist policies destroy purchasing power by increasing the price of goods, hitting particulary poorer citizens, who spend a higher proportion of their income on traded goods. Instead, citizens at risk must be confident that their governments will protect and empower them through robust social policies, life-long access to learning and training.
See how the EU supports displaced workers
OECD countries set aside an average of 0.6% of GDP a year for active labour market policies, e.g. job centres, retraining schemes and employment subsidies, to ease the transition to new types of work in a dynamic job market. One instrument designed to deal with adjustment costs is the European Globalisation Adjustment Fund (EGF), established by the European Commission in 2006. The Commission states that since its establishment, EGF co-funded retraining for over 140,000 redundant European workers. The average re-employment rate across 13 cases which have completed the implementation of the EGF programmes was estimated at 56%.
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