How Does Globalization Affect America

Interests Affected

Globalization as a process carries its value that has been promoted by the United States since the postwar period. Broad consensus has been reached among policy-makers and scholars to establish neoliberal international trade policies for the promotion of open world market and the determination of the dollar value through the market. America received striking benefits soon. Domestic industries began to compete with foreign ones in the result of significant reduction in cost and rise in financial flow. For example, the US World merchandise has increased from less than 10% of the world GDP to nearly 20% of it from 1950s to 1990s. (Krugman, 1995) Booming patterns were showing in imports and exports. In 1970s, American-made manufactured

Outsourcing directly contributed to job loss domestically, with 2.9 million people were put off work during 2001 to 2009. (Lerman & Schmidt, 1999) Employers relocate their industries overseas to enjoy lower cost of cheap labors and avoiding paying payroll taxes or social security. With less financial flow in the industrial stream, national tax base has been impaired. National income declines, so the government is lack of revenue to consolidate social welfare and public services, which has resulted in dramatic drop in people’s average living standard and quality of life. Taking America’s comparative advantage of high-end technology and human resources into consideration, one may easily find that the nation will leave its low-end and limited skilled productions and human resources to oversea market to boost productivity and maximize profitability at the same time. This action leads to severe division of the national labor market, improving the quality and standards of high-end labor market while sacrificing the benefits and job positions for lower-skilled labor. Unskilled workers, which generally characterized by a lower educational attainment, lose their jobs to oversea cheap labors and in turn are forced to take nonstandard jobs (day labor, temporary work, seasonal work, part time work) with declined wages, little benefits and protection. (Holzer, 2011) Additionally, international free trade agreement also contributed to the situation. Those agreements like NAFTA have given certain privileges to foreign corporations at the expense of national protection of the domestic jobs and economic prosperity. For instance, as the recent United States- Korea Free Trade Agreements (KORUS FTA) goes along, both national