Globalization on Stability and Wages
In globalization, exchanges and or rather transactions of goods and services, human resources, capital, cultural practices, and technologies happen across the globe. Generally, globalization is a good concept as far as business is concerned. However, it is not without its flaws, and instability and low wages are some of its leading faults.
Globalization is significantly associated with peaceful coexistence, but it can also lead to political instability. According to liberals, as observed Day (2017), nations that depend profoundly on the international economy, are more likely to experience more significant influence and economic growth, and more democracy, as well as better peaceful conditions both locally and internationally. In contrast, most dependency theorists have shown that high levels of global trade and investment tend to bring on board greater economic inequality. According to the relative deprivation theory, such imbalances lead to enhanced political instability (Day, 2017). Categorically, globalization based on the exportation of agricultural products promotes poverty and inequality, establishing the foundation for political unrest.
On the other hand, globalization also affects wages negatively overall. According to a new Economic Policy Institute, globalization has “depressed wages for American workforces.” Categorically, the research observed that international trade lowered wages for non-college-educated human resources by 5.5%, costing the average worker about $1,800 (Economic Policy Institute, 2013). Elsewhere, Slaughter and Swagel (2018) found out that globalization increased the demand for more-skilled workers at the expense of less-skilled workers, subsequently increasing the income gap between the two groups. Accordingly, while globalization is advantageous in many ways, it is also costly in some, including the fact that it leads to political instability and decreases in wages.
References
Day, B. (2017). The link between globalization and political instability. Retrieved on 6/8/2020 from https://www.gsb.stanford.edu/insights/link-between-globalization-political-instability
Economic Policy Institute (2013). Globalization has lowered wages for American workers, new EPI study finds. Retrieved on 6/8/2020 from https://www.epi.org/press/globalization-lowered-wages-american-workers/
Slaughter, M. J., & Swagel, P. (2018). Does Globalization Lower Wages and Export Jobs. [Place of publication not identified] International Monetary Fund.