In reading an article on the New
York Times website I had to ask myself if globalization was indeed a factor in
job loss. My immediate response was yes due to outsourcing. More specifically, the US’s outsourcing of
jobs to other countries because of the availability of cheaper labor. The article, however, stated that few economists
would agree. They would say that trade/
outsourcing does not negatively impact jobs in the US. I found this very odd so I had to ask myself
what aspects of globalization would have any effect on the amount of jobs in
the US?
Would specialization, meaning the
countries only produce what they are the most efficient at? I would say this does have a negative impact
on the jobs in the US because the US does not produce many things which it can
export. Also, the US imports many goods that
may have been able to be produced in the US, but end up being less expensive if
produced by another country.
I believe the ability to
communicate with businesses across the globe is the major negative impact on
jobs in the US from globalization. Other
than a job that deals with only domestic individuals or companies, the job
market is now in reach of people living in other countries. From the US, for example, one can work for a
company in France. I believe this has
been the greatest effect of globalization on US jobs.
http://economix.blogs.nytimes.com/2012/08/29/changing-views-of-globalizations-impact/
http://economix.blogs.nytimes.com/2012/08/29/changing-views-of-globalizations-impact/
I would first disagree with your comment that the U.S. doesn't produce many things it can export. Given the fact that we are the second-largest exporter worldwide, there are obviously some things we do well at producing. Some of the things we excel at producing and exporting are agricultural goods, industrial products, and consumer products, just to name a few categories. I would agree with your comment if it were in terms of lost manufacturing jobs, but we're still a leading exporter and producer of services. I understand your point on specialization, given that the U.S. produces many things that it is relatively not the most efficient at producing. However, you make it sound like foreigners having access to the job market is a bad thing for the U.S.. Since the U.S. is a leading exporter of services (like financial and technological services), it is good for us to embrace globalization because we need to maintain and grow our exports to maintain our comparative advantages. If we had a closed economy where only domestic individuals or companies participated, how could we sell as many of our services or grow our profits and networking? We really couldn't. Without trade, we wouldn't be able to gain in terms of productive and allocative efficiency, or even specialize in anything. With trade (including exports), though, a country is guaranteed that it won't be bad at producing everything, but at least be able to produce some things well. Also, to add to your example of someone working for a company in France from the U.S., here's an example right here on campus. Sodexo is a company based in France, and our Ambrose cafeteria workers obviously work from the U.S.. This is one example of how foreign companies and growth do not hurt us, but in fact help Americans to find and maintain employment. Plus, globalization provides more opportunities even more numerous opportunities for Americans to find employment, along with many more choices as well, regardless of how good or bad the American economy is faring. Lastly, I agree that outsourcing has led to job loss, but it has also led to cheaper products that have allowed Americans to save more money and stretch their dollar further.
ReplyDeleteA particular nation's job losses from international specialization and division of labor would be sector-specific (in import-competing sectors), and temporary; the gains from specialization would be economy-wide (but especially concentrated in sectors with export potential), and sustained.
ReplyDeleteOne political problem is that these gains are relatively "invisible": The gains to consumers are embedded (hidden) in the lower prices we pay for things that we produce comparatively less efficiently; the gains in sectors with export potential are hidden by the fact that these sectors are yet unknown (jobs lost to trade exist now whereas jobs gained from trade are yet to be determined).