The Effects of Globalization on the American Workers (Essay Sample)

The Effects of Globalization on the American Workers Name: Institution:  The Effects of Globalization on the American Workers Introduction In past few years, most of the industries in the developed world did their production work locally, creating employments for thousands of its citizenry. This trend, however, began to change in the 80s when western corporations began sending their manufacturing works to countries abroad. This development was motivated by the competition in the respective industries, whereby companies were undercutting their competitors through lower costs of labor. In order to remain financially viable, many firms opted to open factories in countries such as Thailand, China, and Mexico where labor was available at low costs (Economist, 2013). These trends have gravely affected the welfare and prospects of the American workers. The inevitability of outsourcing in the current highly competitive global market calls for the stakeholders involved both in government and the corporate world to strike a balance that would ensure that the interests of the workers and the industries are safeguarded in equal measure. The Benefits and Drawbacks of Globalization for American Workers Many companies in the United States have shipped their jobs abroad, especially manufacturing jobs in order to make saving on their production costs. This has come with adverse effects on the American workers. For one, while this has created employment opportunities for the workers in the low-cost countries, invariably improving their living standards, the workers in the United States have had to lose those jobs (Economist, 2013). The job losses in the United States have significantly affected the low skilled workers. Coupled with the fact that these workers cannot afford or even fathom to move outside the United States to seek for employment, they have had to contend with the poverty in the inner cities (Mathani 2016). Besides, the middle class have also had to bear the brunt of outsourcing. This happens where US companies are using the Internet in offshoring back-office work and Information Technology to workers in Philippines and India (Economist, 2013). The job choices in the American labor market have been significantly reduced and this has resulted into the loss of technological know-how. Many younger workers are no longer looking for training in some technical and skilled manufacturing careers as they are experiencing the massive exportation of these jobs to overseas countries (Levy & Paul, 2016). Furthermore, outsourcing has placed pressure on the wages of American workers, significantly shrinking what they earn. These workers invariably find themselves in competition with the workers in the low-wage countries and experience difficulties when it comes to saving for retirement, paying for the education of their dependents, and buying their homes (O’Brien, 2016). In sum, with outsourcing going on, the wages of many workers in the United States will no longer sustain their middle-income lifestyles (Lavy & Paul, 2016). O’Brien (2016) also concurs with the negative effects of outsourcing raised herein, arguing that the American communities that have been exposed to the competition from China have seen their manufacturing workers relegated to persistent employment. According to Mathani (2016), the non-manufacturing workers, on the other hand, have been forced to take lower wages. The unemployed manufacturing workers have as a result had to rely on safety nets such as food stamps, disability, and welfare at a higher rate as compared to those times when firms had not started outsourcing. On the other hand, even though the American worker does not appear to significantly benefit from outsourcing, there are areas in which they have actually gained from outsourcing. According to Levy and Paul (2016), the money that is saved from outsourcing jobs could be used in the creation of other job opportunities in the United States. For instance, a start-up company could succeed if it uses an inexpensive foreign call for conducting its customer service. This according O’Brien (2016) implies that blocking the outsourcing of job would not necessarily keep jobs in the United States. The inability to outsource some of its works will cause some start-ups to fail to get off the ground; therefore, the jobs that would be created as a result would never exist. The Economist (2013) report also confirms that while the unavailability of employment opportunities deny many Americans purchasing power, outsourcing has helped multinationals to avail more goods to the American consumers at far lower prices as compared to if the production had been based on the United States. In a nutshell, the gains of outsourcing have rarely trickled down to the American worker but largely benefitted the business firms themselves (Mathani 2016). The business community has defended the practice on the premise that it is helpful in uplifting the economic growth and development of the United States, especially through lowering the input costs of manufacturing and services and also expanding new open market overseas (Ferrel & Ferrel, 2010). When American businesses become more competitive, they invariably stand better chances for surviving against the wholly owned firms in China, which also enjoy low-labor cost inputs. In other words, the proponents of outsourcing argue that if the business firms in the United States will not look for workers in the low-cost labor market abroad, they risk becoming less competitive within the global economy. This is projected to invariably weaken the economy of United States and, therefore, threaten the remaining American jobs (Mathani, 2016). The proponents also argue that job losses are temporary and that as long as the workforce in the US retains its high levels of skills and sustain its flexibility, the high value jobs will not disappear since companies are constantly improving their productivity. Conclusion Outsourcing is a function of globalization in the business world which has provided a level playing field for businesses across the world. As a result, American firms have been forced to export some of their production and service activities to their overseas subsidiaries in order to keep their operation costs low and therefore be able to keep th...