ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Politics and Social Issues»
  • Economy & Government

Globalization and the American Economy

Updated on November 12, 2017

Globalization has become synonymous in the blue collared American public with job loss. The idea that “American” jobs are being sent overseas for cheap labor and even cheaper products. This however is not what the ideals of globalization are built on. The purpose of globalization is to unite and create a better world economy with trades of goods, services, and capital. Can the United States, one of the world’s leading economies, help move the world forward without hurting themselves though? Has the economy taken a down turn in the name of globalization? We will be taking a look at large scale industries, and the American public to do so.

One of America’s largest industries in its long line of innovation and manufacturing is the automobile industry. Jeffery Rothstein spent years in three different automobile plants to see what the effects of globalization have done to a higher end industry. The automobile industry is being considered as higher end due to company stability and union representation. Rothstein had found in his multi-year study that these automobile companies were using globalization as threats to their workers. This was seen as a form of “whip-sawing”, a tactic used by management to threaten workers. The employees were being told that if labor and production demands were not met, their plant would be closed and the jobs were going to Mexico. Through Rothstein’s study it can be argued that globalization has not only directly impacted the economy, but also indirectly as well.

Rothstein’s study gives a deeper look directly into a specific industry, but what about the economy as a whole. How has the average American been effected? A report from Josh Bivens of the Economic Policy Institute says that the increased trade with developing countries and the moving of jobs is costing workers around $1,800 or an earnings loss of 5.5%. Bivens puts into perspective though that globalization is not the only cause for these losses. A reason stated for such drastic losses is the over valuing of the U.S dollar, which is increasing the price for exports, but decreasing the price for imports. The connection can be made that due to the dollar being highly valued, it is cheaper to import goods, causing jobs to be lost. Bivens also makes the point that with this decrease in wages for non-college graduates comes an increase in wages for college graduates. As a fundamental rule of economics, an increase in money comes an increase in spending. There is a balance between the two and not just a loss of wages for one party.

With these negatives, there are however some positives. The effects of globalization are resonating through developing countries as the World Bank is encouraging these countries to remove trade restrictions. As these restrictions are lifted developed countries, like the U.S, can trade their products for materials, food, or goods. The lifting of trade restrictions and a free global market has decreased the chances of war as well. Another thing this gives developed countries is the ability to invest into the economies of the developing countries. In doing so, the developed countries can charge high interest rates, yielding a high return.

The biggest problem that has come from globalization is that it has increased the wage gap. As touched upon earlier, the rich are becoming richer and the poor are getting poorer. As job may be moved overseas the costs of labor and materials will go down. With these decreases in costs one would hope that the new increases of available funds would go to paying the American worker, but they do not, they go to high level executives of these companies. The Economic Policy Institute had found between 1978 and 2014 that executive pay had increased by 994% while private sector and non-supervisory level workers only increased by 10.9% (Mishel). With the decreasing middle class, the effects of globalization are being contributed to its loss.

Bivens, Josh. “Using standard models to benchmark the costs of globalization for American workers without a college degree.” Economic Policy Institute, 22 Mar. 2013, www.epi.org/publication/standard-models-benchmark-costs-globalization/.

Hamdi, Fairooz. “The Impact of Globalization in the Developing Countries.” Linked-In, 11 June 2015, www.linkedin.com/pulse/impact-globalization-developing-countries-fairooz-hamdi.

Mishel, Lawrence. “CEO Pay Has Grown 90 Times Faster than Typical Worker Pay Since 1978.” CEO Pay Has Grown 90 Times Faster than Typical Worker Pay Since 1978 , Economic Policy Institute, 1 July 2015, www.epi.org/publication/ceo-pay-has-grown- 90- times-faster-than-typical-worker-pay-since-1978/.

Rothstein, Jeffrey S. When good jobs go bad: globalization, de-Unionization, and declining job quality in the North American auto industry. Rutgers University Press, 2016.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: "https://hubpages.com/privacy-policy#gdpr"

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)