Chat with AI
Global Business Today 8th Edition by Charles Hill
Edition 8ISBN: 978-0078112621Global Business Today 8th Edition by Charles Hill
Edition 8ISBN: 978-0078112621 Exercise 1
What does the evidence tell us about the relationship between globalization and wage rates in developed nations?
Explanation
Verified
Verified
In the twenty years leading to 2005 the global work force has more than quadrupled. This is because to the entry of China, India and the East European countries and the destruction of manufacturing jobs in the United States and Europe. This has led to the depression of wages in the developed world in the manufacturing sector. However this did not mean that the standard of living went down since most goods and services were now available at a lower price. Primarily it was felt that this could not apply to the services sector but even that sector has seen a massive "exporting" of its jobs. This has pleased the anti-globalization lobby to no end.
But these critics miss the bigger picture. This is that the benefits of globalization far outweigh the costs. Globalization allows countries to concentrate on those activities, whether in manufacturing or services, that they have the core competency in and can do most efficiently.
While this outsourcing reduces cost of products and services in the developed nations it increases the buying power of the countries where these jobs are outsourced to. This enables those consumers to buy products from the developed countries.
But these critics miss the bigger picture. This is that the benefits of globalization far outweigh the costs. Globalization allows countries to concentrate on those activities, whether in manufacturing or services, that they have the core competency in and can do most efficiently.
While this outsourcing reduces cost of products and services in the developed nations it increases the buying power of the countries where these jobs are outsourced to. This enables those consumers to buy products from the developed countries.
Global Business Today 8th Edition by Charles Hill
Why don’t you like this exercise?
Other Minimum 8 character and maximum 255 character
Character 255
