The dark side of globalization / by kevin murray

There are obvious advantages to globalization in the sense that the products that so many of us buy and utilize each and every day are significantly less expensive because they have been produced overseas.  While that savings does, in general, make a material difference to the pocketbook of American consumers; in point of fact, not too surprisingly, the real main beneficiary of globalization is never going to be the consumer of those products, but actually the manufacturer and owner of those products.  The reason that this is so, is that multi-national corporations are quite cognizant of the importance of reducing their costs for materials, their costs for labor, and their costs for infrastructure so as to stay competitive and to say relevant; of which, globalization allows those corporations to be very efficient, and therefore not only to maintain their gross margins, but actually to increase them, which benefits directly the executive management of those corporations, as well as the stockholders of the company.


It then follows that domestic labor and domestic infrastructure will often not be able to compete against globalization, because their cost structure is fundamentally appreciably higher; so then, these former jobs are essentially exported overseas to foreign workers, as well as there being less of a need for specific infrastructure to build these products domestically, since it has been outsourced from America.  All of this essentially is deflationary for wage appreciation in America, especially as unions in private industry are in exceedingly steep decline, so that, the prime beneficiaries of such globalization is often going to be, only those that are the owners of the products so being produced.


In addition, it should be clarified that in America, there are labor laws that must be adhered to in regards to the working conditions, such as for the safety and comfort of the workers, along with rules in regards to overtime, break time, unemployment, social security, and Medicare that employers are obligated to provide to their employees; whereas in other countries, such laws may be quite lax, non-existent, or are overcome relatively easily, by, for instance, simply subcontracting out jobs, so that these foreign employees are not directly employed by the true beneficiary of that labor.  This also means that all the laws that have been passed in regards to the environment, such as clean air, and clean water, zoning laws, and community commitments are circumvented by simply having a given company's factories located outside of the United States.


The bottom line is that companies that are strictly domestic, cannot hope to compete against globalization, because the cost structure of those foreign countries are structured in a much more favorable way.  In other words, the playing field isn't level and it also isn't fair.  Again, while consumers in America might indeed benefit somewhat from globalization, the actual only real meaningful beneficiary is the multi-national corporations that take advantage of labor, environment, legal and infrastructure systems overseas in a manner which allows them to make a lot more money while passing a bit of those savings onto consumers.   This simply means that the rich are getting a lot richer; while more and more valued domestic jobs are vanishing, and unions are left high, dry, and irrelevant.