Over the years, globalization has been able to transform how countries relate with each other and how they trade amongst themselves. For many people, globalization has contributed significantly to the growth and development of world economies making it easy to transfer commodities and services from one part of the world to another. Globalization is the integration of all the world's economies through the use of technology and other available tools. As a result of technologies, major companies situated in different parts of the world can do business at the touch of a button. The effects of globalization are visible in the American economy. There are those who have benefitted from globalization and others who have been negatively affected by the phenomena ( Pelegrinová, & Lacný, 2013) . This essay seeks to discuss how globalization has impacted the American economy focusing on the losers and winners of the phenomena.
Winners
American consumers are among the winners of globalization. Through globalization, American companies can access cheap labor in international markets like India and China where they can make products which they can, in turn, sell to the American consumers at lower prices. The accessibility to different products at lower prices improves the living standards of American citizens ( Pelegrinová, & Lacný, 2013) .
Delegate your assignment to our experts and they will do the rest.
Globalization has also promoted the growth and expansion of American companies leading to the creation of employment opportunities for millions of American citizens. According to Hung, & Hammett through globalization, American companies can gain easy access to untapped international markets where they can sell their products and improve their sales volume. Improved sales volumes translate into high-profit margins and the increased ability to onboard many employees. Furthermore, it is important to note that globalization helps grow the economy of the country resulting in a reduction of various commodities and services. The purchasing power of American consumers is also improved, making them able to buy many products (2016).
Additionally, globalization has provided American consumers with a variety of options when purchasing products and services. Many foreign companies have set up operations in the United States with the primary aim of tapping into the lucrative American market. The foreign companies come with new products into the American market, products that can fulfill the different needs of the American consumer thus providing cheaper alternatives that were not there before ( Das, 2010 ).
The increased competition between American and foreign companies is an advantage to American consumers because of the superior quality of products and services that arise from the competition. Due to increased competition, each company, whether domestic or foreign increases its efforts towards manufacturing quality products that can compete with others in the market ( Gujrati, 2016 ). The consumers benefit because there will be a variety of high-quality products to choose from. From the analysis of the winners of globalization, it is clear that the phenomena have played a significant role in improving the economies and wellbeing of people in different societies.
Losers
Despite the advantages presented by globalization, there are also many drawbacks that result from it especially concerning American consumers. Pelegrinová and Lacný noted that t hrough globalization, there had been an influx of foreign workers into the United States who are willing to work for less than what the average American worker is paid. The presence of cheap labor in the country makes many companies hire them instead of the American workers thus further reducing their living standards and affecting their purchasing ability. Unemployment among American consumers also affects companies because their products will not be bought leading to reduced profit margins (2013).
Additionally, globalization leads to a significant trade deficit between the United States and other countries. This means that the cost of the country’s imports exceeds its export costs to other countries. A trade deficit can destabilize the economy and dislodge the United States from its position as one of the leading and most influential world economies ( Vyshnevska, Kaliuzhna, & Banyeva, 2018 ). Trade deficits affect local industries which employ millions of people in the United States. The fact that foreign products flood the market prevents local companies from expanding and growing.
Conclusion
In summation, it is evident that globalization has both positive and negative impacts on the United States’ economy. Foremost through globalization, American companies can access cheap labor in international markets like India and China where they can make products which they can sell to the American consumers at lower prices. Globalization has also provided American consumers with a variety of options when purchasing products and services. Furthermore, the phenomena have contributed to an improvement in the quality of products and services being manufactured in the United States. Despite the advantages provided by globalization, there are also other negative impacts that it has on the economy of the United States. Globalization has led to an influx of foreign workers into the United States who are willing to work for less than what the average American worker is paid. This leads to high unemployment rates among many American citizens.
References
Das, D. K. (2010). Another perspective on globalization. Journal of International Trade Law & Policy, 9 (1), 46-63. doi:http://dx.doi.org/10.1108/14770021011029609
Gujrati, R. (2016). Trends toward globalization: Challenges & issues. Splint International Journal of Professionals, 3 (12), 96-104.
Hung, J. H., & Hammett, P. (2016). Globalization and the labor share in the United States. Eastern Economic Journal, 42 (2), 193-214. doi:http://dx.doi.org/10.1057/eej.2014.50
Pelegrinová, L., & Lacný, M. (2013). The impact of globalization on economies of developed countries. Journal of Economic Development, Environment, and People, 2 (3), 25-34.
Vyshnevska, O., Kaliuzhna, O., & Banyeva, I. (2018). Globalization Processes and Trans nationalization of the Economy . Varazdin: Varazdin Development and Entrepreneurship Agency (VADEA).
