Why do some people believe that Wages and Working Conditions are worsened because of Globalization? Do you agr

Question

please i need a short answer

Answer 1

Because they don't understand a basic principle of economics: trade creates value.  Marx's failure to understand this simple precept was the most expensive mistake that anyone has ever made in the entire history of the human race: the cost has run to trillions of dollars, and tens of millions of lives, and is continuing to increase every day.

Answer 2

Short answer - the ability of American companies to hire cheap foreign laborers is depressing wages in America be decreasing labor demand in America (and increasing available worker supply as well). Also, Americans have been working longer and harder since the current wave of globalization started than in the past - to keep up with the downwardly falling wages.

There are two sets of conflicting data - the late 19th Century in the US was a time of enormous economic expansion, we were basically  "free traders" back then, and wages grew. Working conditions didn't improve until the early 20th Century and beyond.

On the other hand, there is little evidence that the current wave of "free trade" has done anything to increase wages or improve working conditions. There is evidence that the increased ability to buy cheap labor from China, Mexico and India is depressing wages in key sectors in the US economy - and the proponents of globalization have failed to show how the market is going to "work itself out" - what sector are Americans going to work in that is going to increase our wages?

Alan Tonelson, in "The Global Race to the bottom," explains why the current wave of free trade is being handled differently than in the late 19th Century - in a way that will harm America rather than help us.

As far as the "free traders" claim that trade creates value - David Ricardo and Adam Smith came up with THEORIES on how trade creates value. But reality is often far different from "basic economic principles," and textbook models. Economic textbooks in the past have also said that it was a basic principle that interest-bearing checking accounts would collapse the financial system, and that unemployment below 5.5% would increase inflation. Economics texts have an "all else being equal" clause that is tantamount in many cases to saying "we'll assume that gravity doesn't exist."

Globalization is so complex that I just can;t give you a short answer. Both sides have their points. I don't know how raising tariffs would help us necessarily right now. But, I do see how taxing companies that outsource their labor to China, India, etc. would help me right now. I don't have to buy the goods that would rise in price by using me as their manufacturer rather than a laborer in China --> but I do have to pay rent and buy food, and i find the downward wage spiral is cutting into that.

-an Angry American who thinks David Ricardo was wrong - or not relevant to our current situation