Globalization is an economic trend that sweeps over the world and has changed consumer’s buying behaviour that comes with advantages such as product variety increase for consumers, making companies more competitive, improving the quality of products and lowering prices. With Globalization, economic activities flow in two directions. It is either Americans lose jobs to foreign workers or gain jobs and make economic activities flourish. The US has adopted in sourcing method, it in sources more than it outsources, mostly the technical services such as computer programming, telecommunications, banking, call centres, engineering and many other private services. All this leads to a higher service offered to foreigners than what American economy gets.
In the U.S, most people have lost their jobs and manufacturing industries due to deindustrialization and when the U.S send operations offshore and gain jobs when other foreign countries and corporations invest in America. Free markets enjoy open trade where it offers opportunities in America where it helps foreign economies build a solid and strong stand. Income growth in other countries is a higher rise in demand of goods and services, which they are not able to produce. The foreign demand for imports translates to an opportunity to the U.S organizations to compete to offer those products. If America does not use the opportunity, it would mean losing of exports sales and loosing of jobs in those areas.
Globalization leads to growth in production in the U.S .If off shoring effect is applied in the U.S it gives an opportunity for prices to be lowered which will promote the new businesses processes that take advantages of cheap operations like IT. This will in turn create jobs for the U.S workers to design and implement IT packages for a range of companies and industries. Creating new opportunities and new jobs throughout the U.S economy makes off shoring possible. Higher productivity being the only way to improve the standards of living in the economy, American workers ability to produce more goods and services hourly has been the key to the U.S success economically.
A free economy where there is ability to move from one job to another in case of openings and where there is flexibility in the economy which labour and capital resources move freely among organizations and industries creates a significance in the U.S economy. Due to existence of competitive markets and competition both domestic and foreign competitors it will lead to change which calls for flexible labour and capital markets that are very important. To solve all this, proper monetary and fiscal policies can be put in place to ensure that aggregate demand keeps the economy, which will help generate jobs to replace the lost ones. The policies should help American workers become more flexible so that they can adapt to any changes prevailing.
Restriction on trade on such things such as tariffs, quotas or other barriers are concerns on the workers which acts as measures to slow down the rate of losing jobs in the affected industries which in the end leads to higher costs on the rest of the economy that are much higher than the benefits. Trade adjustment programmes may be useful to those who have lost their jobs due to outsourcing.
Johnson, J. H., Burthey III, G. C., & Ghorm, K. (2008). Economic Globalization and The Future of Black America. Journal of Black Studies, 883-899.
Moon, B. E. (2008). The United States and Globalization: Struggles with Hegemony. Lehigh University. Oxford University Press.
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BA 325 Week 4 Discussion Globalization.docx