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What is one advantage and one disadvantage of the global economy for American workers?

What is one advantage and one disadvantage of the global economy for American workers?
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What is one advantage and one disadvantage of the global economy for American workers?

What is one advantage and one disadvantage of the global economy for American workers?

What is a Global Economy?

The global economy refers to the interconnected worldwide economic activities that take place between multiple countries. These economic activities can have either a positive or negative impact on the countries involved (Edology).

The global economy comprises several characteristics, such as:

  • Globalisation: Globalization, or globalisation, is the process of interaction and integration among people, companies, and governments worldwide. Globalization has accelerated since the 18th century due to advances in transportation and communication technology.
  • International trade: International trade allows countries to expand their markets and access goods and services that otherwise may not have been available domestically. As a result of international trade, the market is more competitive. This ultimately results in more competitive pricing and brings a cheaper product home to the consumer (Investopedia).
  • International finance: Money can be transferred at a faster rate between countries compared to goods, services, and people; making international finance one of the primary features of a global economy. International finance consists of topics like currency exchange rates and monetary policy.
  • Global investment: This refers to an investment strategy that is not constrained by geographical boundaries. Global investment mainly takes place via foreign direct investment (FDI).

Advantage of the global economy for American workers

  • American workers can be paid higher wages for the work they do which is also more specialized.
  • An increase in economic growth means:
    • better living standards for workers,
    • higher incomes for workers,
    • more wealth in a country

Disadvantage of the global economy for American workers?

  • Global economy allows businesses to increase jobs and economic opportunities in developing countries where the cost of labor is often cheaper, while neglecting the locals (Americans). 
  • Thus, American workers eventually get less job opporunities, as its cheaper to employ workers overseas in China, India etc.

Sources

https://www.masterclass.com/articles/how-globalization-works-pros-and-cons-of-globalization#what-are-the-disadvantages-of-globalization

https://www.investopedia.com/insights/what-is-international-trade/

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