How Globalization affects Employment Industrial production related employment has produced the middle class and the

overall prosperity in the United States. Such employment has distinguished developed markets from these developing and undeveloped, indeed. The higher income from relatively higher margins of the industrial employment has helped fiscal reserves to risen, thus social and infrastructural expenses to enhanced, hence to setup the developed world’s higher standard of life and overall prosperity. In the last couple of Centuries, the United States has led the developed world creating a vivid and productive workforce to respond of the demand, national and international, for industrial goods and the related engineering, marketing, etc. professions. The system has performed sufficiently enough to lat countries like Germany, Japan, and some other countries to distinguish as highly developed industrialized nations. Developed industrialized countries reached high productivity carried on by ever-developing mechanization, supported by adequate education, infrastructure, and most important adequate employment. The industrial employment has been a main part of the market demand that spurred economic growth. However, the marketplace and related competition has changed with the China’s arrival and the Soviet Block demise. The globalization has accelerated rapidly and the productivity has skyrocketed unconditionally. The huge Chinese capacity of qualified inexpensive labor (labor expenses have been rising steadily, however the Chinese market demand has compensated by rising too), the Post-Eastern Block countries in some extend replicated Chinese market, however they has not succeeded in establishing a proper demand markets in compare to the Chinese one. Transnational corporations have been taking advantage of this new emerging opportunities, through moving and outsourcing of industrial production, through acquiring inexpensive assets (specifically in the PostEastern Block) and market expansion “CATCHING FISH IN THE MUDDY WATER”. However, by lowering these markets equity and the consequencual demand by maintaining lower salaries. Simultaneously, the US and other most developed markets’ industrial employment has been steady declining, alone with the middle class and fiscal reserves. Deficit has been running high alone with national debt. The 2007-9 Recession has accelerated and aggravated the process of shorting employment. By itself, the 2007-9 Recession was a product of market imbalances of demand-to-supply ratios (whereas the supply-todemand gradually changed into demand-to-supply, because the demand in the practiced trickle-down Capitalism has become a gravitating issue). In many places at my articles employment was directed as being mostly affected by the ongoing Globalization and ever rising Productivity, however this article is to localize and show the direct consequential relation between shortening employment and the ongoing Globalization and rising Productivity. It should be quite simple of a task to be objective

when observing how many mostly industrial jobs have been diminishing in numbers because either (1) the improving technologies or/and (2) the outsourcing and moving out of industrial production from the US and EU to China, India and beyond. Thus manly these two reasons for reduction of employment are to be considered unquestionable by no one could be liberal or hardcore conservative. The difference between the liberal democrats and the conservative republicans is not, obviously, in the previously stated conclusion but mostly in the approach considered for getting out of the ongoing situation to economic revival that will reduce this conclusion, therefore if it (the conclusion that the high and rising unemployment is directly related to the ongoing globalization and rising productivity) it should be indiscriminately unquestionable to deal with it by clearing some fundamental points. Then, only then economic parameters should be set up to overcome the situation and bring new instruments of economics to help to prompt and maintain highly paid employment. Here is some points to state: approach one, the private employment is currently mostly used economic instrument, which is basically prompted mostly (if tax breaks and subsidies are not included) by market forces. Approach two; the government related employmenthas been either direct or indirect through projects or programs. Both approaches have been very affected under the new conditions: in the first place, tax breaks and subsidies work until certain time when these directly could be overwhelmed by the resistance of the market forces such as shortening demand for thus manufactured goods or provided services and in the second place, under the current financial system the pilling deficit and national debt limits the abilities of any administration to keep long term projects and programs well such becoming political issue being most likely interrupted. Both approaches can not properly function in a system of high interest commercial lending because these are not directly connected to genuine market fluctuations but are artificial methods for creating employment. To establish more adequate market conditions for adequate employment, in which market forces are used in their best under such new developing conditions, the free entrepreneurship should be let to create and maintain relative employment, whereas the role of the government is minimized. The new conditions should be precisely evaluated and the necessary changes and approaches should be implemented.  ew global market N conditions affected by the much cheaper industrial production in China, India and elsewhere have shorten the return on investment and profitability for the main employers the small and medium investors and the small to medium businesses, New global market has given all the powers to the transnational corporation and the big investors, which abilities to borrow on lower rates and access public funds through market exchanges, however the industrial production has been moved or outsourced the majority of their and their investment and reinvestment goes away

from the US territory. Despite that, the transnationals and large investors benefit directly from the globalization and rising productivity, they bring small and declining employment.  For small and medium businesses and investors is relatively easy to open and establish new businesses. The lack of business laws and regulations in contracting, the “shady” business practices, the lack of personal liability to corporate structures make life much easier, except when must go to the bank in attempt to borrow, and well then life may well become close to nightmare, because the financial institution consider the points from above more like a lack of security and high risk and either rejects such loans or lend on high interest to offset risk. When the government gets involved by making easy loans the consequences may well follow the steps prompting to the last recession by exasperating value of equity, of overcapitalization. Because whenever the market balance is disrupted, either redundancies or shortages occur. The relaxing financial policies and regulations allowing large financial institutions to speculate brings similar effect to the small and medium investors what the “shady” business practices bring to small and medium businesses such as expensive money and financial difficulties because of the lack of security and high risk, indeed. Whenever governmental regulation are used, instead of criminalizing business violations and enhancing personal liability for corporate structures and business transactions, consequences are negative to the market forces because most of the time such regulations are quite partial and politically influenced. Thus criminalizing business violations and enhancing personal liability of corporate structures could much better equalize the so much needed small businesses and investors, which are the main employer on the US market, to the big businesses and investors, it also will jack up the security and minimize the risk to lenders. The role of public equity should be also fundamental in balancing the ongoing effect from the Globalization and rising Productivity: so, what “public equity” could be considered for: Infrastructure, Medicare, Social Security, Education are considered public equity because of the effect these impose over the marketplace in time of shrinking industrial production (here it should be mentioned the gaining “equity” approach is some used by China for balancing their marketplace), but here also could be stated that such policies of gaining and growing “equity” may work much better on the US market that eventually may prompt more employment by replacing the artificial governmental programs to such market related approach to balance market demand-to-supply based on percentage of the GDP. To explain clearly, instead of the debt as a main economic issue in this new economics balancing demand-to-supply should be the main issue thus avoiding inflation and deflation; To succeed in these new approaches Monetary Policies should be well adapted to accommodate them.

Subsidies to targeted industries of renewable energies, organic farming, environmental tourism and etc. are to be market tools to prompt some employment when simultaneously save Earth. Under the current economic approaches, industrial production is just moved from one place to another considering profitability, thus the relatively expensive technologies to generate renewable energies, whereas reducing companies competitiveness and the consequential ROI. Only targeted subsidies, tax breaks, could make these industries compatible. Obviously, to keep employment in functional working limits in these new economic conditions small and medium businesses and investors should be setup to be finance-able on a low interest rate; Monetary quantities should be enhanced to accumulate if SMB and SMI expand their marketshare and ”equity” approaches alone with targeted subsidies should help the balance. The market security should be considered number one priority.
© Joshua Konov, 2009

Sign up to vote on this title
UsefulNot useful