Question

how has globalization impacted domestic markets in the United States?

Answer 1

Globalization has in many ways expanded consumer choice of goods and services, while also reducing their average price. American consumers now spend less on certain products than they did half a century ago. Such improvements coincided with increased productivity of the long-term workers. Even the productivity of employees increased between 2012 and 2014, due in large part to technological changes. These productivity gains have helped many U.S. economy industries. Globalization, for example, has made capital flows more effective in the domestic finance sector.

Additionally, in the last few decades, the United States has become an undisputed leader in technological progress in healthcare, despite having healthcare costs balloning over this time period. Seven of the 10 biggest pharmaceutical companies are actually based in the United States. The same trend continues for medical devices: as recently as 2014, 45 per cent of global market share was dominated by the United States alone. Furthermore, eight of the top 10 producers of medical devices are domestically focused. The United States also leads the globe in the technology industry, as more than 30 per cent of all global IT spending comes from technology products manufactured in the United States.

Although there is some evidence to suggest that globalization and outsourcing have contributed to the loss of manufacturing jobs in recent decades, most evidence suggests that the real culprit is increased automation. The U.S. manufacturing labor force, for example, declined by about a third while U.S. manufacturing output grew by 40 percent from 1970 through 2015. This pattern is consistent with smart business practices, as manufacturing companies typically improve their productivity by rising labor costs. It also makes sense that American companies would choose to outsource production, given the relative strength and size of the United States workforce.

To retrain those employees, both the public and private sectors will need to take action. The specific actions which need to be taken can vary from case to case. For example, retraining staff in some cases may require public-private collaborations at the local level. This may include training in government-funded skills at community colleges or technical schools to give workers the skills necessary for jobs in the private sector. In the private sector, businesses that dominate a particular geographic market may be best suited to retrain their own workers through apprenticeships for the required positions.