How did globalization affect the US economy in the 1990s?
Looking specifically at the United States, globalization had a mixed impact on the economy.
On the one hand, globalization was helpful to consumers in the United States. Globalization allowed consumers to benefit from lower prices that could be gotten by importing things from low-wage countries. This process was seen most clearly in the rise to power of Wal-Mart during this decade.
On the other hand, globalization hurt specific sectors of the American economy. Most specifically, it was workers in relatively low-skill jobs in manufacturing who were hurt. They tended to be outcompeted by workers in poorer countries. Manufacturing jobs also declined due to increasing automation as US firms tried to become more efficient so that they could compete with foreign companies.
Throughout the 20th and 21st centuries, the United States economy has become increasingly globalized as the U.S. government has promoted free trade policies and transportation costs have fallen. Economists disagree about whether or not globalization has been a benefit or hindrance to the U.S. economy, but all agree that globalization has permanently altered its nature.
On a macroeconomic level, globalization has seemed to benefit the U.S. economy. The ability to import products from nations with low wages (such as China) has greatly reduced the price of many products; this has increased consumer spending power.
However, microeconomic data indicates that perhaps globalization has not been quite so beneficial. As a recent Economic Policy Institute study found, globalization has increased demand and, consequently, wages for college-educated workers but has also decreased wages for U.S. workers without college diplomas. Since manufacturers can export low-skill jobs to nations which have low or no minimum wages, U.S. workers without college degrees are less in-demand; consequently, their annual wages have fallen 5.5%, or $1,800. The ultimate result of this process is that wealth inequality (the difference in average wages between the rich and the poor) is increasing.
Workers hurt by globalization have begun to push back against it during the 2016 U.S. presidential election. Both Donald Trump (Republican) and Bernie Sanders (Democrat) have vociferously opposed the free trade policies which prompted globalization and have said that if they are elected they will push to institute policies which protect American workers disaffected by globalization.
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