Causes of Famine Human Influences Research Paper

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Impact of globalization on US jobs

One can certainly debate when globalization began in the United States. Was it when millions of slaves were imported from Africa? Was it during the Spanish-American war when the US sowed the seeds of a colonial empire, that, ultimately, never went far. Was it when the US signed the first free trade act with Canada in 1987. That was probably the most reasonable starting point for the purposes of this paper, because this paper places emphasis on labor market impacts.

The unemployment rate in the United States in October, 1987, when that act was signed, was 6.0%. When NAFTA came into force January 1st, 1994, the unemployment rate in the United States was 6.6%. Today, it is 4.1% (BLS.gov, 2017). Now, these outright facts aren't everything in terms of the debate about free trade's impacts on American workers, but they make the point quite clearly that any story being told isn't about the availability of jobs.

So what is the debate about? Labor leaders say it is about labor. AFL-CIO President Richard Trumka (2011) points out that globalization has transformed labor markets around the world, and the United States is certainly no exception. There are several key forces that drive globalization – these include but are not limited to technological improvements in logistics that reduce barriers to the flow of goods, trade agreements to lower trade barriers, and technology that seeks to improve communications. Some of these are organic developments, but some are not. Trumka argues that the elements of globalization that are negotiated – i.e. trade agreements – lack protections for workers. While capital and goods can move freely in an open market, workers cannot. And in many countries, workers lack basic legal protections, include the right to organize. Workers are seldom given a seat at the table in these negotiations. When labor cannot move as freely as capital or goods, that creates a situation where labor needs stronger protections, or otherwise it will be subject to exploitation. But are the forces of globalization to blame, or is there deliberate action at the national level that has undermined organized labor? Arguably more the latter – if your case study is the US, look to the Republican Party, starting with Reagan and the air traffic controllers as the source of reduced union rights, reduced union membership and reduced union political power. Indeed, Vachon and Wallace (2013) do make the point that "political climate variables are strong determinants of union density", and their findings are stronger for that variable than for their concept of globalization.

Trumka's conclusion that the working people of the world should be given voice is salient, but he is less convincing in arguing that this is at the globalization level – look to the national level to see where workers are getting a tough ride, because they aren't getting that same tough ride in Europe. Don't blame the rest of the world for the struggles of America's workers – that's a homegrown problem. Vachon and Wallace (2013) point out that union membership peaked in 1954, decades before any semblance of modern globalization – are we really going to blame a 30-year-old phenomenon for a 60-year-old trend?



NAFTA and the US

Does NAFTA harm the US? Good question. We've seen that the unemployment rate has dropped. So it's not in the number of jobs. We know that stock markets are way up, so it's nothing to do with the health of American corporations The economy has struggled, but that's more Gramm-Leach-Billey than NAFTA. Real wages have gone nowhere, but they haven't gone anywhere since Reagan. This really calls into question who the enemy actually is here. The negative trends seen in union membership and real wages predate NAFTA by years if not decades. Economic measures have improved since NAFTA. Indeed, the economic trendline was well ahead before the financial crisis, and that crisis was related to changes in financial legislation, not NAFTA.

Feng, Hu & Li (2013) make a further good point. They rightly note that the rise of China is a trade-related factor in shifting labor markets. It's basic math, really. Canada cannot shift US labor markets. Mexico can make something of an impact, but not to suppress real wage growth for twenty-three years. But larger global forces, and the entrance of China into global markets, most certainly can. China's entry into the World Trade Organization in 2001 really sent investment into Chinese production systems skyrocketing.

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Combined with automation, it is reasonable to see that China has had an impact on real wages, because of the cost-competitive nature of its economy. The authors note that this relates directly to offshoring, which creates a gap between those who own the capital and are thus beneficiaries of this practice, and the workers who lose their jobs and when they find new ones usually find worse ones.

NAFTA is a boogeyman for the peanut gallery, but there is no evidence that NAFTA hurts US labor en masse; anecdotal evidence aside, it creates more than it destroys.



Outsourcing Jobs

Now, unrelated to NAFTA is outsourcing of jobs. This is an interesting issue because improvements in both transportation and in communication are key elements of globalization. These are driven organically in part – outsourcing call center jobs is a matter of corporate policy to leverage technological improvements. Outsourcing production is a different matter, and its rapid rise directly relates to the reduction of trade barriers. Also to Americans always wanting cheap stuff and never figuring out that's why they are losing all their manufacturing jobs – it's not that globalization doesn't play a role here but market forces matter, too.

There are new jobs created from globalization, too, and the US has done very well on that front. The key here is that it's not the same people. A steel mill worker who gets laid off at the age of 45 and has a grade 10 education is not magically going to learn to code. This is important – labor markets do not adjust as quickly as capital markets do. A company can outsource jobs in a matter of months. Those workers may not ever be able to find work again. And that's in America, a nation of unprecedented internal mobility. Imagine being Salvadoran and listening to an American whine about having to move to another state to find work.

What never happened – either at the international level when trade deals are reached, or at the national level when the impacts of those trade deals becomes apparent, is that there was never anything put into place to actually help the people that were going to suffer. On aggregate, America does very well from globalization, because the rich and powerful always do. But there are still those who suffer, and they were not ever given consideration. That's what aggregate thinking does – you think we created net more jobs, but fail to realize that the people getting the new ones aren't the same ones who just lost theirs.



How Does Globalization Affect Developing Nations?

One might argue that globalization promotes income inequality, and that's not wrong. But that's also avoiding the facts, because the facts don't support the narrative. How's this for facts – There is a "robust" correlation between free trade and poverty reduction (Bergh & Nilsson, 2014). Even if inequality is rising, to care that the ultra rich are getting ultra richer is missing the point entirely; the point is that extreme poverty is being eradicated. The gap is widening, yes, but so what? Far fewer people are starving today, and when they are, it's usually in a country that lies outside of the globalization paradigm (i.e. North Korea, Niger, war zones, etc.).

Moreover, globalization does not worsen food crises. There are fewer of them, they are less intense, and again they occur in nations with no particular globalization impacts. Unless you think Niger is a major player in global trade. No reasonable person, looking at the evidence, could possibly reach the conclusion that poverty today is worse, that more people are starving, because of globalization. Every single measure, every single study, says otherwise. You may as well deny climate change while you're at it.



How Does Globalization Negatively Affect the Environment

Is globalization going to be blamed for climate change, too? Wow. Because nobody burned carbon before we started signing free trade agreements. It's like this – globalization is the result of burning carbon, not the cause of it. When….....

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