Global Economy Becomes Even More

¶ … global economy becomes even more interconnected, and the information technology revolution continues to decrease the cost of outsourcing, developing countries with substantially lower labor costs increasingly have a comparative advantage in a variety of sectors. This has put companies located in countries with mature economies in a precarious position, either cut employee pay, or move relocate to regions with lower labor costs (Freeman).

Looking at the overall trend when it comes to benefits, it is clear that for the past few decades, they have been increasing in virtually all sectors of the economy. In many companies, especially the large corporations, benefits that were once reserved for upper management, such as stock options, have increasingly become a feature of even hourly positions. Some of these benefits have even gone from being "fringe" benefits used to attract top talent, to virtual requirements for almost any job (Bennett and Kaufman, 160). Health-care coverage is a prime example of this, and even low paying fast food jobs tend to have some sort of coverage for full time workers. Yet as such benefits become a normal part of any compensation package, they also raise the cost of doing business for many companies, potentially decreasing competitiveness. With the latest recession, this has forced many companies to cut some benefits all together.

The issue is perceived differently depending on the generation. For example, older workers such as "baby boomers" might expect retirement accounts as standard for any well paying job. Being older, and more disposed to health problems, heath-care coverage is also a top concern. For workers just starting out however, and especially for those simply looking to get any work they can due to the economy, such benefits may seem less important. Additionally, the so called "millenials" face a very different labor market than older generations. They understand they may be competing with people from all over the world, and that they may have to change careers several times in the face of rapid technological social change (Reese et al., 134). In that context, things like a 401k or a pension which one builds over twenty years seem like less of a priority or even possibility. The different generational expectations among workers means that employers will have to tailor their compensation packages much more individually than in the past.