Chapter I

THE PROBLEM

Background of the Study

The term Labor has played a very important role in this changing economy. It is

the main ingredient for employment and developing companies worldwide. It is

indispensable tool in many fields of economic development.

The concept of economic development refers to the process of improvement in the

economic opportunities, and quality of human lives; and reduction in the poverty. Better

health facilities, better education, clean environment and better utilization of resources

are the important components of Economic Development. Moreover the justified

distribution of goods and services is also the part of economic development. A good

distribution network that includes the good transportation system results in not only better

delivery of goods and services but the improvement of labor mobility (Henderson, 2007).

Economic globalization, the ongoing process of greater economic

interdependence among countries, is reflected in the increasing amount of cross-border

trade in goods and services, the increasing volume of international financial flows, and

increasing flows of labor.

The Philippines is one of the largest suppliers of a variety of workers for overseas

employment. The economy deploys professionals and technical worker including doctors,

engineers, nurses, teachers, and IT specialists all over the world. On the other hand,

semiskilled workers are also deployed including technicians, production workers,

caregivers, entertainers, domestic workers, and many others. Inadequate domestic

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employment opportunities as well as the higher compensation package abroad exert a pull

on many of educated workers to seek overseas employment (Macaraeg, 2005). And they

are termed as OFW’s.

The term “Overseas Filipino Worker (OFW)” is used to describe those who are

employed in foreign countries through a contract with their employers. Overseas Filipino

workers or OFWs are Filipinos who are employed in foreign countries. They travel

abroad to seek better opportunities in order to provide for the needs of their families in

the Philippines. They are also known as “Overseas Contract Workers” (OCWs), since

they work abroad through a contract with their employers (Cosalan, 2010).

While labor migration has demonstrated numerous benefits—such as the

economic development of sending and receiving states—it also carries hefty costs to

those who cross borders for employment. Migrant workers are vulnerable to economic

shocks, exploitation and human rights abuses, to name a few. In response to these

dynamics, a variety of state and private sector institutions have emerged, forming

migration infrastructures (or systems) that facilitate the movement and welfare protection

of transnational workers. Examples include government regulatory departments,

recruitment agencies, and state supported mechanisms for redress, etc. (Ignacio et al.,

2008).

Labor migration can be beneficial for those countries that send as well as receive

migrant workers. It can facilitate economic development and growth in both countries of

origin and destination. Labor migration has revitalized workforces, promoted

entrepreneurship, and supported pension schemes in receiving countries. In developing

regions where migrants come from, transnational communities have benefited from
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remittance flows, transfer of investments, and the exchange of technology and critical

skills.

In nut shell we can say globalization can be applied is a movement, a

phenomenon and a force. And the scope of the globalization is increasing as the time is

passing (Euro Stat, 2007). One most common definition of globalization states that

Globalization is a process of integrating different world economies. Globalization is

integration among the people, government and companies of different countries

(Rothenberg, 2003).

Globalization is not a new concept. In past people use to travel to other places for

gaining control on others lands, for finding out the better living style, for finding out the

new places and to earn profits by selling in different regions. These activities were

carried out even thousands of years before. But it is said that the earliest form of

Globalization was started from Greek, Roman, Egyptian, and Babylonian Empires. In the

regime of Mongols, the famous Silk Road connected the Central Asia and Europe

(Wikipedia, 2011).

Through the development of Globalization world is getting into an identical

culture that is understood by every nation, we may call it intermixing of the cultures.

People of world especially people of rich countries are getting less conscious about their

nations cultures and they have started emerging in world culture. Globalization has

resulted in increasing the diversity and boosting telecom and tourism sector of the world

(Nigam, 2009).
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Douglass (2006) identifies four major sources of globalizing tendencies that

transform households, namely: (1) overseas labor migration, (2) marriage with foreigners,

(3) intercountry adoption, and (4) the entry of an increasing number of transnational

residents. Overseas labor migration has affected Filipino households’ formation,

organization, and reconstitution over the last four decades. Compared with migration, the

numbers involved in marriage to foreigners and intercountry adoption are quite

miniscule.

The number of unemployed people in the globe has now reached a record-high of

more than 200 million, compared to 150 million 12 years ago. Underemployment, now

reaches more than 1.5 billion even as the global crisis threatens to slash more livelihood

from both labor-exporting and labor-importing countries.” (Labog, 2008). There is a

strong push from developing countries to further liberalize the labor market for many

beneficial economic reasons.

The Philippines has been open to labor mobility since the 1970s, and this has

provided the country with decades of experience as a source of international migrants.

The primary reason for Filipinos’ continued emigration has been to seek employment

overseas. While the Philippine economy has been steadily improving in recent years, with

unemployment rate declining from 7.5% in 2009 to 5.0% in 2017, the country’s

unemployment situation is still commonly cited as one of the main reasons why Filipinos

continue to search for work abroad. Employment opportunities in other countries,

regardless of the type of job, are perceived to offer higher salaries/compensation, and

better income and lifestyle packages (eg health benefits, insurance) (Guinigundo, 2017).
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Most international migrants in Asia are motivated by the prospect of earning

higher wages overseas (Smart et al. 1986). As long as potential foreign earnings exceed

local wages (after subtracting costs of movement and job placement), workers are likely

to respond to higher foreign wage rates by engaging in labor migration to one of the

region’s core migrant-receiving countries (Abella, 1988).

Contract migration is seen as a mechanism to help break the vicious cycle of

underdevelopment in which poverty is both cause and effect, through employment and

foreign exchange earnings. Increased employment leads to greater income, which

generate higher savings for investments whereas increased foreign exchange earnings

lead to better access to investment funds and assets for capital expenditures and thus

more employment opportunities (Vasquez,2002).

In the Philippines, a sense of solidarity latent among countrymen and women

abroad was skillfully mobilized in order to capitalize on three things: 1. The desire of

Filipinos to make money abroad to support family back home; 2. The desire of Filipinos

abroad to consider themselves part of their nation; and 3. An appeal to pride in order to

raise the skill-level and market niches of the migrant workers.

Evidence suggests that globalization has a positive effect on the country’s

economic growth and employment. In particular, trade openness and foreign portfolio

flows have contributed to higher per capita GDP growth in the Philippines, following the

implementation of FX liberalization reforms. A significant increase in OF remittances has

raised consumption, investment, labor productivity and economic growth. These OF

remittances have also supported the Philippine economy during normal times and crisis

situations in the past, and this is expected to continue in the future (Ang et al., 2009).
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Ling Ping Chen (2003) argues that migration and remittances “inscribe” global

forces into the everyday lives of their households and their material status-making

activities. Remittances allow migrant households to elevate their standard of living (e.g.,

private school for kids, higher income, consumption lifestyles, and so on) compared with

other households in their communities. Working abroad becomes part of the household’s

strategy of upward mobility and long-term security within the context of several layers of

overlapping translocalities. Income and remittances thus represent social position and the

social power that goes with it.

Significance of the Study

This research study will be more significant to the following:

To the Respondents. The research findings will be significant to the respondents

in order for them to be aware on how they contribute in the globalization.

To the Researchers. The research findings will be significant to the researchers

who can use it as launch pad for other research studies. The information can also be used

as a basis for improving similar studies.

To the Future Researchers. This study will provide knowledge to them Labor

export and mobility as Impacts of Globalization and serve as their basis when they write

or make their own research regarding the same study.

Scope and Delimitation

This study is delimited to the determination of the Labor Export and Labor

Mobility: Impacts of Globalization among OFW in Singapore. The input includes age,

sex, civil status, region of origin, educational attainment and mode of occupation; ways
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and processes of going to Singapore and observed reasons of working in overseas

primarily in Singapore. The output includes the Labor export and Labor Mobility: Impact

of Globalization among OFW in Singapore.

The instrument used in this study was a questionnaire which comprised of four

parts; the first part was the respondent’s profile, the second part was the ways and process

of going to Singapore, the second part was the observed reasons of working in overseas

primarily in Singapore, and the last part was the impact of labor export and labor mobility

among OFW in Singapore. The questionnaire was constructed by the researcher.

The descriptive research design was employed in the study. The respondents

comprise of 25 informants who are working in Singapore. The following statistical tools

were utilized in the analysis of data gathered: frequency and percentage, and mean.

Theoretical and Conceptual Framework

The following literature and researches were of great help to the researchers in

conceptualizing this study.

Globalization is defined as the mobility across borders of goods and services,

people, capital and knowledge (BIS, 2017). In the past half century, the world economy

has become much more integrated, interdependent and intertwined as globalization and

liberalization appear to have become an inevitable and irreversible trend. Regional

trading arrangements, the removal of restrictions on the flow of trade and investment, and

rapid technological changes have led to the deepening of economic integration and the

heightening of globalization (Aldaba (2011).

To define globalization, Dreher followed the explanations of Clark (2000), Norris

(2000), and Keohane and Nye (2000). He summarized that “globalization is meant to
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describe the process of creating networks of connections among actors at multi-

continental distances, mediated through a variety of flows including people, information

and ideas, capital and goods. Globalization is conceptualized as a process that erodes

national boundaries, integrates national economies, cultures, technologies and

governance and produces complex relations of mutual interdependence” (Dreher, 2006).

The processes of globalization have been driven by a number of forces.

Worldwide expansion of capitalism and technological progress are at the core of the

dynamics of globalization. These forces have been in operation for centuries but have

increased in scale and intensity in recent decades.

Globalization has been associated with wide-ranging reductions in barriers to the

movement of goods, services and factors of production. The greater competition brought

about by globalization has also produced dynamic efficiency gains through improvements

in management and technology.

Economic globalization includes flows of goods and services across borders,

international capital flows, reduction in tariffs and trade barriers, immigration, and the

spread of technology, and knowledge beyond borders. It is source of much debate and

conflict like any source of great power. The broad effects of globalization on different

aspects of life grab a great deal of attention over the past three decades. As countries,

especially developing countries are speeding up their openness in recent years the

concern about globalization and its different effects on economic growth, poverty,

inequality, environment and cultural dominance are increased. (Jenatabadi, 2014)

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Due to its ever-accelerating trend, globalization has been one of the most closely

observed processes among scholars, policymakers, politicians and even the general public

in recent years (Collier and Gunning 2008).

Impact of globalization on Migration. Contemporary views on migration depart

from the earlier premise of the push-pull theory on migration. According to this theory,

people moved either because social and economic forces in the place of destination

impelled them to do so, or because they were attracted to places of destination by one or

more social and economic factors there. Observers of migration flows have long seen the

vast changing nature of migration. What used to be purely economic reasons for

migrating no longer hold in many cases? Globalization of communication technology has

affected extensively the original impetus of individuals to migrate. Linkages between

receiving and sending countries are readily established. Networks connect migrants and

non-migrants, where news and information are shared. This sustains the flow of

migration. Studying networks particularly those linked with families and households

sheds an understanding in the development and encouragement in additional migration

(Hefti, 2011).

Impact on countries of origin. Filipinos, being extremely family-centered,

would above all remit earnings to the family left behind. The standard of living of these

families would improve considerably, and their status in the community elevated

commensurate to the remitted green bucks. It is known that Filipinos abroad remit

approximately $7 B to the Philippine economy. A large group of NGOs demand that

these remittances be used for structural changes to eventually make migration

unattractive. Nevertheless, individual or micro-level processes show their impact on the

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macro-level. Migrant groups abroad were gradually founded. These associations pool

their resources and provide funds for projects in home communities. Many organizations

here have helped repair local churches in the Philippines; or expand library facilities, or

built playgrounds. Remittances have therefore also effected improvement on the lives of

community members outside migrant families (Hefti, 2011).

Impact on receiving countries. Migrants bring to the receiving countries many

customs, practices and behavior patterns from the home country. Smaller branches of the

original culture are recreated in host countries, such as "little Italy" or Chinatown, in New

York and Los Angeles. Multi-ethnicity is seen in large urban communities. However, a

multicultural society may be threatening to native-born citizens of receiving countries.

This can elicit resentment among the citizenry which can trigger social conflicts.

Migration politics in many Western countries are not integrative. The effect of these

policies is the marginalization of migrant workers. Marginalization takes the form of low

incomes, and unskilled jobs. Factors such as unequal opportunities prejudice and

discrimination may be involved in prolonged periods of marginalization (Hefti, 2011)

As illustrated in the research paradigm, the inputs are categorized into profile of

OFW in Singapore, ways and processes of going to Singapore and observed reasons of

working in overseas primarily in Singapore.

The output includes the Labor Export and Labor Mobility: Impact of

Globalization among OFW in Singapore.

The study revolved around the paradigm is presented in figure 1.

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Input Process Output

Profile of OFW in Singapore
in terms of:
a. Age Labor Export and
b. Sex
Survey, Document
c. Civil Status analysis, frequency Labor Mobility:
d. Region of Origin count and percentage, Impact of
e. Educational weighted mean, Globalization for
attainment;and analyze, interpret and
f. Mode of occupation OFW in Singapore
evaluate data
Ways and processes of
working to Singapore

Observed Reasons of
working in overseas or
Singapore

Figure 1. The Research Paradigm

Statement of the Problem

This study aimed to determine the Labor Export and Labor Mobility: Impacts of

Globalization for OFW in Singapore.

Specifically, it sought answers to the following questions:

1. What is the profile of the OFW in Singapore in terms of the following:

a. Age

b. Sex

c. Civil Status

d. Educational attainment; and

e. Mode of occupation

2. What are the processes and ways of getting a job/work in overseas primarily in

Singapore?
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3. What are the observed reasons of working in overseas primarily in Singapore?

4. What is the impact of labor export and labor mobility among OFW in Singapore?