Global Talent Update - September 2019
Europe, Middle East and Africa
Over the last few weeks, the biggest news to affect the United Kingdom has been Brexit, which remains one of the most concerning global stories due to its broad potential effects on the world economy. The latest on the matter has Brexit Secretary Stephen Barclay making reported inroads with the European Union on discussions involving the United Kingdom’s Brexit negotiations, according to a recent BBC article.
“Brexit Secretary Stephen Barclay has said the UK and EU share a "common purpose" in reaching a new withdrawal deal, after a meeting in Brussels with chief EU negotiator Michel Barnier,” according to the news publication.
Additionally, Barclay said the two had “serious detailed discussions” and that things were moving forward. The meetings and negotiations come as the United Kingdom is running up against a deadline to exit the EU by October 31.
As the article continues, “On Thursday, European Commission President Jean-Claude Juncker said a new Brexit deal could still be reached by then. Prime Minister Boris Johnson said some "progress" was being made, although it was important not to ‘exaggerate’ this.”
But, the question becomes, what will a no-deal Brexit do to the United Kingdom economy? This is especially important to consider given the fact that the October 31 deadline is just over a month away.
According to The Guardian, it could have a major impact. “A no-deal Brexit will slice almost 3% from the UK economic growth over the next three years compared with just 0.6% from the rest of the EU, according to the latest health check of the global economy by the Organization for Economic Co-operation and Development,” the news service notes.
But in more uplifting news in recent days, the United Kingdom has unveiled a greater commitment to fighting climate change. According to a recent government press release, “The UK will double its investment to help developing countries turn the tide against climate change and species loss.”
While helping combat global warming, the move could also be a boon for job creation in the technology sector. “The Fund will give British scientists and innovators access to up to £1 billion of aid funding to create new technology to help developing countries reduce their emissions and meet global climate change targets,” according to the release.
For Hong Kong, the ongoing protests have continued to greatly affect the region’s economy, especially the tourism industry. According to a recent report by Bloomberg, for example, it appears that a number of tour groups are no longer going to the area to travel.
In fact, the article found that “the number of Chinese group tours to the city fell 90% compared to a year ago in the first ten days of September, according to data compiled by the Travel Industry Council of Hong Kong.”
Notably, for August, the decline in tourism to Hong Kong was an astoundingly high “63% compared to a year ago,” according to Bloomberg.
Along with tourism groups going to the region for travel, it’s little surprise that the hotel industry is also struggling due to the protests. “Hong Kong’s hotel industry is struggling with a collapse in bookings after protesters disrupted flights from the territory’s airport last month,” as Bloomberg reports.
However, there is also uplifting news for the region’s economy and future business growth opportunities, according to the South China Morning Post. In fact, while some sectors of the economy may be seeing a downturn, there are still many positives. “American companies are still eager to invest in Hong Kong and are unlikely to be put off by a bill that could pave the way for diplomatic action and economic sanctions against the city’s government, commerce chief Edward Yau Tang-wah has said,” according to the news service.
He added that companies based in the U.S. “understand Hong Kong’s situation” and continue to be interested in exploring business opportunities in the region, despite the ongoing protests.
In North American global talent news, there has been an influx of headlines in recent days on the ongoing General Motors worker strikes, which are entering a second week. In a recent article by Time Magazine, it’s noted that the labor movement in general has seen ongoing issues in recent years, which serves as the backdrop to the most recent strikes. “The labor movement has long been struggling in the U.S., as fewer workers join unions and as high-profile organizing drives, like a June attempt to unionize Volkswagen employees in Tennessee, fall short,” according to the magazine.
The article continues by detailing what’s happening at General Motors. “On Sept. 16, 50,000 General Motors workers walked off the job in their first strike since 2007, protesting idled plants and low wages,” according to the publication.
But, what’s the reason for these strikes? “The recent labor unrest is in part fueled by uneven economic growth. While companies are prospering and the stock market hovers near all-time highs, the benefits haven’t been felt by many workers, who are often stuck in temporary jobs with no benefits,” Time Magazine notes.
Meanwhile, the strikes have had powerful effects on the company’s production not only in the United States, but in other countries as well. “Company spokesman Dan Flores confirms that the 3-day-old strike has forced GM to place about 1,200 workers on temporary layoff at a Canadian factory that makes pickup trucks,” according to ABC News. “The plant in Oshawa, Ontario, near Toronto makes the previous generation Chevrolet Silverado and GMC Sierra full-size pickups.”
In other U.S. economy and labor news, two U.S. political swing states reportedly lost the most factory jobs in the last twelve months, according to Bloomberg News. “As the U.S. presidential campaign heats up, Democratic candidates may want to look at two Rust Belt states that narrowly helped deliver Donald Trump’s victory in 2016: Pennsylvania and Wisconsin,” according to the news service.
Notably, the two states lost a large amount of jobs, according to recent data by the Labor Department. “In Pennsylvania, home to steel mills, the number of factory positions fell by about 8,000 and in Wisconsin the loss was just over 5,000,” as Bloomberg reported.
However, there’s evidence that some gains are being made for the manufacturing sector, according to a recent report on Yahoo Finance. “Several economic data have revealed that U.S. manufacturing is slowly recovering from last month,” according to the article. This includes positive manufacturing data that showed an expansion of manufacturing activities as well as a rebound in industrial production in August.
A dovish Fed also means good news for the industry: “Lower interest rate means low cost of capital. Consequently, U.S. manufacturers will be induced to invest more, which will generate higher growth,” according to the report.