Globalization has penetrated everywhere of the world and continuously reshaped the economic flow as well as social institutions. There is currently a debate on whether or not there is a conflict between globalization and welfare states. The main feature of welfare states is that governments provide a well comprehensive protection in terms of redistribution, full employment, high social and labour standards, and economic growth by adopting a series of social policies (Yeates, 2007, p.640). Because of new structure of global labour division and pressure to maintain economic competitiveness advantages, Globalization has made this full protection become more expensive for governments and uneconomic to comprehensive strengths of countries. However, this does not necessarily mean the diminishing of ‘welfare’ states as the deepening process of globalization and welfare states are concepts full of dynamics and connotations. As shown in statistical research, welfare states are updating their social policies in order to provide new effective forms of protection to their citizens instead of less engaging in supplying welfare. Moreover, although facing the mutual challenges of globalization, different countries have distinct responses given the special nature of each state. The Canadian new social policy paradigm is going to be reviewed in this paper to reveal how states could minimize the conflict between globalization and essence of welfare states.
Challenge of Global Division of Labour
Globalization refers to the ‘international integration of markets for good, services and capital’ which happens almost everywhere of the world and is usually studied at a global level (Genschel, 2004, p.616). This integration also comes along with distribution of the production factors worldwide which forms a global production network to minimize the costs and maximize the profits. New structure of global division of labour has formed in this globalization era. Companies of developed countries have relocated more and more production process to low-wage developing countries such as India and China to save huge production costs and earn more benefits. Meanwhile, developed countries take the advantages in the world stage by playing dominant roles in the area of high value-added products and advanced technology. This has caused the fundamental change in domestic society and social policies in welfare states. Welfare states are almost belong to the camp of developed countries, obtain competitiveness advantages in the world and maintain high living standards with their strong financial capital and advanced technology. To keep their economic advantages, social policies in welfare states have given the priorities to develop the level of knowledge, information and technology. Low-skill workers thus face the high risk of unemployment, inferior living conditions and welfare states could not offer enough jobs to them anymore with transferring low-added value...