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Jobs and Wages Globalization Creates Jobs Boosts Wages

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Globalization has both its pros and cons. When we consider, and apply its true effects on both a nations jobs and wages, and present the facts, on a point by point basis, we can truly see how globalization encourages job growth within a country, as well leads to increased access to wages.

Presented in this brief account, will be those arguments of those against globalization, and how advocates of globalization often respond.

Globalization Costs Jobs and Lowers Wages

Advocates for minimizing globalization in a given country, often cite eroding standards of living as globalization’s greatest negative effect on the citizens of a country. The points below often are the three most cited reasons against restricting globalization:

+Eliminates jobs in developed countries

+Forces wages lower in developed countries

+Exploits workers in developing nations

Eliminates Jobs in Developed Countries: Many globalization protestors believe that globalization is responsible for the elimination of many at-home manufacturing jobs in developed nations. They criticize the fact that businesses are becoming more in the practice of sending good-paying manufacturing jobs abroad to developing countries at a lower cost, believing this is bad business ethic.

Forces Wages Lower in Developed Countries: In this respect, anti-globalization pundits state that globalization causes worker dislocation thus results in a steady slicing of wages. Wal-Mart for example, was reported to offer their U.S sales staff a miniscule wage of $13,861 in 2001, when at the time the U.S federal poverty line for a family of three was determined to be $14,630. [1]

Exploits Workers in Developing Nations: Opponents of globalization claims that when a firm participates in international outsourcing of their production and services exploits those workers in low-wage nations.

Globalization Creates Jobs and Boosts Wages

Supporters of globalization argue that globalization improves the standard of living, and makes possible new ways of life for any given citizen. A majority of supporters agree that globalization:

+Increases wealth

+Generates flexibility within the labour market

+Develops those economies of participating developing nations

Increases Wealth: Increases wealth and efficacy of both developing and developed nations. One study had produced results suggesting that when an increase in “the ratio of trade to national output by 10% over a 20 year period can boost per capita income by 3.3 percent”. [2]

Generates Labour Market Flexibility: Here many protesters believe that globalization produces positive advantages by generating labour market flexibility in developed nations. In short this argument suggests that dislocated workers, during widespread job turnover has benefits. For example, flexibility in the labour market allows workers to be resituated to sectors of the economy where they are more valued and in much higher demand.

Develops Those Economies of Participating Developing Nations: India for example, had become a very lucrative and attractive location for software writing activities throughout most of the 1980’s and 1990’s because of the countries well trained, low cost, English speaking electronic technicians. India is now a globally known location used as a base for many companies outsourcing their customer service to, as well payroll and benefits management.

As presented there are two sides of the coin, both presenting us with a series of both pros and cons of globalization. 

[1] Wild, John. (2004). International Business (The Challenges of Globalization). Third Edition. Pearson Prentice Hall

[2] Wild, John. (2004). International Business (The Challenges of Globalization). Third Edition. (Pg 20). Pearson Prentice Hall

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