Secondly, globalization is also believed to induce governments to deregulate labor markets to provide advantages to national and foreign investors. Government may do so, for example, by reducing employment protection, unemployment benefits and minimum wages because capital is mobile, shareholders have many options to invest, thus, strong bargaining power.Trade liberalization amplifies the firms’ bargaining power More competitions between firms and increasing trade liberalization is considered to induce race to bottom at the expenses of workers, and labor market deregulation, in particular, is often held responsible for deteriorating working conditions and well-being of workers(e.g OECD 2004, chater 2, Haberlia et al
Although, it is not an illegal process it cause severe tax gaps in countries economies, which could lead to inflation of prices. Furthermore, “the global entertainment, media, and information market is one in which American-style globalization is most hegemonic. Television shows, movies, books, music, video games, and other entertainment from Europe, especially non-English-speaking Europe, will likely struggle to achieve the global reach and market penetration that characterize their American counterparts.”(Howard J. Wiarda, 2007, p 117). Indeed, many critics of globalization feel that the free movement of labour has resulted in the weakening of specific cultures in favour of greater economic and cultural hegemony. To conclude, it is important to highlight that globalization is an unstoppable process that have many advantages as well as many drawbacks.
Import competition is of concern because countries like the United States are continually becoming more dependent on international trade. The inevitable consequence of this trend is that an increasing proportion of the labor force will be dependent on world trade for employment. It is also worth noting that an increase in international trade affects certain sector disproportionately. The call for protectionism can therefore be traced directly to the decreased performance in several major industries. The shifts in comparative advantage are responsible for losses resulting from international competitiveness.
As compared to the first half of 2013, economic conditions are already better since growth increased with an average of 3.7 percent in the second half of 2013. Consequently, expectations of increased economic growth in the United States are rising as people believe that this will be the best year since the tribulations of 2008 global recession. Generally, America’s GDP growth will become stronger in 2014 averaging at least 2.7 percent becaus... ... middle of paper ... ... the same. The Federal Open Market Committee should base its employment policy on outlook for the level of employment or unemployment through substantial improvement in labor market outlook. In conclusion, the current macroeconomic situation in the United States is characterized by moderate growth because of better economic conditions that were brought by the events of 2013.
While all of this is happening, the world economy is being effected: economically, culturally, socially, and politically. It is known that the economy is definitely effected by globalization, but not always in a negative way. In a sense, the world revolves around some situations dealing with globalization. Countries around the world are becoming more of a unified world because of the advantages and technologies of globalization. “The globalization both production and capital has the affect of limiting the effectiveness if states in managing their own economies, and limiting their ability to adapt policies that are not seen to be market friendly” (Goudie 531).
Many different factors contribute to the exploitation of developing countries and has caused many issues for them economically. In spite of the fact that free trade increases opportunities for trade internationally, it also increases the risk of failing for small companies in undeveloped countries that cannot compete on an international level. I cannot definitively say that globalization itself is completely good or completely bad, however I do believe it has caused great losses for the poor and middle class.
This will lead to an Win-Win situation for companies to trade in terms of export and import products. Firms in developing countries produce goods based on technology which was leveraged by developed country having greater global market share. This also leads developing countries using that technology but do not try to innovate the technology. Developing countries who identified and brought new technologies are now making more income for example India leveraged heavy machinery and Information technology, China got leveraged with electrical, office, telecommunication products and data-processing products. This is defined as product classification in paper "How Rich Countries Became Rich and Why Poor Countries Remain Poor: It’s the Economic Structure" by Jesus Felipe, Utsav Kumar and Arnelyn Abdon.
Globalization, an important characteristic within the contemporary economic environment, has resulted in significant changes to individual nations in terms of economic development strategies undertaken by national governments. The term globalization refers to the integration of local and international economies into a globally unified political economic and cultural order, and is not a singular phenomenon, but a term to describe the forces that transform an economy into one characterized by the embracement of the freer movement of trade, investment, labor and capital. The drive for globalization has resulted in greater economic growth globally, through the opening up of barriers to international trade, yet this increase in world output is often associated with detrimental effects in relation to the stability of a national economy, being susceptible to the ups and downs of the international business cycle and also both positive and negative effects on the standards of living or quality of life with in a nation. It is often difficult to categories an economy as being globalized, yet there are several key indicator that suggest economic management decisions undertaken by the govt have come as a result of globalization. The main evidence to suggest the globalization of nations has been the growth in global markets, changes in global consumption patterns, the establishment of intergovernmental agreements as well as the rise of transnational corporations.
This has made countries more vulnerable to risk in the future and, lesser long term investments also mean an insecure future outlook. This would also increase reliance of smaller countries on bigger ones. This is not a good thing as they might influence the smaller countries in non-economic matter due to the hold on the economy of the country. The basic principle of international trading is that countries benefit because each country ha... ... middle of paper ... ...ual property rights are not protected internationally, the businesses of such companies suffer a lot. For this reason the countries should have bilateral agreements as well as agreements sponsored by WTO that would allow extradition of criminals.
Proponents of globalization put forward that the benefits of free trade out weigh the costs. International investment and trade have been the machines that drive growth and development... ... middle of paper ... ...developing nations it is the nation's lower standards of labor that make globalization possible and indeed profitable. Allowing a company to pay a laborer a fraction of what his counterpart would be paid in a developed nation. Globalization has a tremendous amount of support as well as a tremendous amount of opposition. While multinational companies tend to push for globalization and therefore higher profit margins, opponents work hard to make sure that developing nations are not taken advantage of in the process.