The Effects of Globalization on the United States Economy

Globalization is the “development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets.”Globalization has been viewed in both a positive and negative light, within the global community.  The specific effects upon the United State economy have likewise received mixed reviews.  Initially showing benefits in the form of lower cost to consumers, these lower costs themselves came with a price.  More jobs were shifted overseas; companies could save money with lower wages and fewer environmental laws.  Yes, their savings were passed on to the consumer, but fewer people were able buy, many having lost their jobs to the “global economy.”  Globalization has spread to nearly every corner of the world and even more jobs, in the United States, have been lost to lower wage underdeveloped counties.

 The theory is that for every job lost another job in a new field or sector will open.  That has not held true.  While globalization has raised national income, it also has reduced the incomes of most workers. As of October 2011 the unemployment rate was 9.1%and the majority of these were labor jobs that were lost to lower wage unskilled workers in foreign markets.  These workers end up on long-term unemployment as labor jobs in this economy are not being created.  Instead more high-end, professional jobs are being created with less workers being available in this field which drives their wages higher.  This creates even further inequalities between those that have and those that have-not.

            Though the cost of items for consumers fell initially as globalization become more widespread during1990’s in to the early 2000’s, it has since seen demand decrease. This will force less production which creates potential shortages that, in the end, lead to a rise in prices.  It is this point that the United States economy is stuck; high unemployment, prices rising for basic goods and less money left for spending.  As of March 2011, “Food prices already are the highest since the U.N. began keeping track in 1990.” This effects overall spending as there is less money available to buy products that are increasing in price.

            While the economy has added jobs, over one million in 2010, growth has slowed dramatically in the last month with additional job increases barely keeping pace with population growth. This is of little help to the more than fifteen million that are already unemployed. People coming out of college with a four year bachelor’s degrees are finding it difficult to get entry level positions that pay well.  Many companies have begun outsourcing their entry level management jobs to other, more affordable countries, this is called offshoring.  The jobs that are available in this country, the higher paying professional jobs, require experience, experience that is becoming increasingly difficult to get in the United States job market.

            As the inequalities in the United States continue to grow, the result of a vicious spiral: “The rich rent-seekers use their wealth to shape legislation in order to protect and increase their wealth—and their influence.” This has lead to a feeling of helplessness among the vast majority.  The majority have banded together to form protest across the global.  In the United States the Occupy Wall Street movement has taken center stage in protest of globalization.  The occupy Wall Street slogan is “we are the 99%” meaning that the top one percent of the population control forty percent of the total wealth of the country. What started in New York, New York on a Saturday in September has spread across cities throughout the country.

            The initial gain from globalization in the form of lower prices for consumers has since shown itself to be a detriment to the United States economy.  A steady stream of job losses through the outsourcing of jobs to foreign countries, for lower wages, has left the United States with a high rate of employment. With an economy that just is not producing enough jobs in the labor sector to benefit the majority of Americans, the populace is becoming angry and frustrated with the corporate culture.  The system does not need to be scrapped, but it does need to be fixed.  At the current time the balance of power is shifted to the minority who possess more than that of the majority.  The scales of justice always find a way to proper equilibrium and this time will be no different, as power will shift and again be in balance.

 

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