Globalization and a Changing World

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What is Globalization?

• Globalization – the increasing economic integration and interdependence of the world’s nations.

• The invisible hand working on the global level– Countries make what they have materials for

and are good at, then they trade for what they need.

As the picture suggests…

• Globalization is hard to ignore.

• Take a minute to examine the tags on your clothing.– Where did you buy the item?– Where was it made?– How do you think it got here?

Examples of Globalization

• The US imports fruit from Chile.• The US company NIKE manufactures shoes in

Indonesia.• When you call the DELL help center, you will

speak to someone in India.• US Hollywood movies are pirated and sold for

cents on the dollar in China.• Any given car will have parts from many different

countries, including Korea, Germany, and China, and then have been assembled in the US.

Some Viewpoints….

• “It has been said that arguing against globalization is like arguing against the laws of gravity.”

– Kofi Annan, UN Secretary General

Cont’d

• Outsourcing and globalization of manufacturing allows companies to reduce costs, benefits consumers with lower cost goods and services, causes economic expansion that reduces unemployment, and increases productivity and job creation. Larry Elder

Cont’d

• In too many instances, the march to globalization has lead to the marginalization of women and girls. And that must change. – Hilary Clinton

Cont’d

• Instead of having a set of policies that are equipping people for the globalization of the economy, we have policies that are accelerating the most destructive trends of the global economy.Barack Obama

Outsourcing

• Outsourcing - Businesses moving manufacturing sectors to other countries in order to reduce labor costs and increase efficiency.– Ex. car parts, computer parts, toys, clothes, etc.

• Increasing outsourcing of information and service sector jobs as communication technologies improve.– Ex.: Call centers in India, drive thus

• BIG CONCERN – loss of American jobs

Sweatshops• Sweatshop: A manufacturing workplace that

typically treats its workers inhumanely, paying low wages, and imposing harsh and unsafe working conditions

• In other countries, workers do not have the protections that they have here – Minimum wage, child labor laws, overtime, safety

regulations, etc.

• Companies accused of using sweatshops:– Nike, Disney, the Gap, Guess, Wal-Mart

Maquiladoras

• NAFTA – North American Free Trade Agreement. Opened up trade between US, Canada, and Mexico.

• Many companies moved manufacturing to just south of the border, these factories Maquiladoras.

• Maquiladoras provided work for many Mexicans who would otherwise be poor farmers

• Women working in these factories make 1/6 of what American workers would make doing the same job.

One Last thought…

• “We must ensure that the global market is embedded in broadly shared values and practices that reflect global social needs, and that all the world's people share the benefits of globalization.”-- Kofi Annan