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How can we pay the price of globalization?

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How can we pay the price of globalization?

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Should we encourage the redistribution of the benefits of globalization? If so, how?

The benefits of globalization outweigh the costs. But the costs are not shared fairly between investors, workers, consumers and the public in general. The appropriate means is still questionable.

This is a three-sentence summary of the answers to this month’s very sensitive question of how to address the human and societal costs caused by globalization.

As if the subject wasn’t complex enough, Hugh Quick questioned my use of the term globalization. In his words: “It is a mistake to try to limit ‘globalization’ to commercial terms and to limit … ‘Globalization’ for me means deepening the knowledge of how other people in the world live and think.”

Doug Kinsey took a view that was more or less shared by many panellists when he said, “Sure, we’ve benefited from cheaper goods from abroad and freer trade between nations, but the cost is horrendous … I remember Thomas Having read Friedman’s book, The World Is Flat, and thought it sounded good in theory, but there would be years, if not decades, of employment crunch here in the US. ”

Various short-sighted government policies, short-term management thinking, the World Trade Organization (WTO) have been identified as causes of the problem (Paul said: “Personally, I am a long-time advocate of globalization, but the WTO decision-making process must be more transparent and subject to controls.), General self-interest and the political process.

These remedial suggestions seemed to be implicitly in line with RCW’s remark: “Historical thinking seems to be, ‘It’s all going to get used to the best somehow. Let the invisible hand of capitalism work its magic. ‘ I’m sorry, but that’s not the case. ”They developed possible answers with much more reliance on carrots than whips. For example, David Wittenberg said: “Punishing companies that make economically rational decisions violates our valued economic freedom. The adoption of protectionist policies … will in the long run lead to rising and ultimately unsustainable costs. ”

Providing the simplest, most direct form of incentive to address the problem, Nello said, “How about lowering corporate taxes to 15% for companies that have 70% of their employees in the US?” Edward commented, “You can try to remedy the situation through tariffs and taxes or provide short term support to laid-off workers, but (it is) … much better to look at where your country has real sustainable global benefits. Many of those America once had are gone … “Doug Kinsey followed up with a specific suggestion:” Let’s pick a problem like transportation and develop an industry around it, with meaningful careers and a meaningful solution. ”

So in our small sample we have an answer to one of our questions: Should we encourage the redistribution of the benefits of globalization? We’re still looking for answers to the question of how to do it. What do you think?

Original column

The UK citizens’ Brexit vote to leave the European Union was neither the beginning nor the end of the anti-globalization and anti-establishment movement. But it drew the attention of a wide audience to a trend that represents some sort of backlash fueled by a long period of neglect of the effects of globalization on world labor markets.

Globalization takes many forms: common markets; free flows of workers, including refugees and migrants; and multinational organizations that are able to move resources more freely, to name just three. Research has shown that the benefits of globalization are considerable. For example, a study of the impact of the Peterson Institute for International Economics’ pending Trans-Pacific Partnership projects benefits on US economic growth and individual incomes that far outweigh the costs of increased job churn (which will occur), with no significant gain or loss Jobs.

The problem, in general, is that the benefits of globalization largely accrue to investors and consumers, while workers bear a disproportionate share of the costs depending on how well educated, skilled and mobile they are. When the imbalance reaches a certain point, it shows in the votes that may derail globalization.

In the United States, the issues were wrapped up for us by the Carrier Corporation, an organization that – rightly or wrongly – has become the figurehead of the flip side of globalization. Carrier executives probably didn’t expect this when they decided to take an action others had taken before them: move 1,400 jobs from the U.S. (in this case, Indiana) to Mexico to increase labor costs nearly seven times and remain competitive worldwide.

A YouTube video of the meeting announcing the decision captures the desperation and anger of the workers being evicted. It also captures a management team trying to act sensibly by giving workers a rare annual announcement of the move – but with a tinny ear. For example, protesting workers at the gathering were asked to calm down in order to obtain important information. It turned out that the information essentially explained the benefits of the move for the company. Employees were then asked to maintain their commitment to quality in the final months of their employment.

The carrier management underestimated how badly the decision would be received. Ultimately, the Carrier decision came shortly after another organization did exactly what Carrier did and did it without starting a firestorm.

Regardless of what Carrier is doing to cushion the shocks of moving to its Indiana workforce – the measures announced include paying tuition fees for workers applying for further education and separation allowances – this is clearly not enough. The Indiana governor has offered retraining assistance. The city of Indianapolis has threatened to “reclaim” the airline’s tax breaks in order to induce them to settle there in the first place. However, the move will leave several hundred workers (out of the 2,100 whose jobs are being quit) whose skills may not be transferable, especially in today’s high-tech job market. The economic impact on their community is shared by thousands of their fellow citizens.

Nobody claims that what carriers or many companies do before it is illegal. In doing so, it is complying with the wishes of the shareholders of its parent company United Technologies. As UT CEO Greg Harris said in explaining the company’s continued high profitability, “What will drive world-class margins … is that we have worked tirelessly to reduce costs.”

Let us assume that this is free enterprise at work, which, in addition to the costs to be paid, also produces advantages. But who bears the costs and how? At least one US presidential candidate has recommended levying taxes on products that Carrier (and presumably others) make in Mexico and ship back to the US on government contracts. Another tax could be developed to meet workers’ retraining and relocation costs. Trade contracts could be renegotiated. The list goes on.

It is becoming clear that their ideas and efforts could be thwarted in the voting booth in the future if advocates of globalization do not start paying these costs to society. How do we pay the cost of globalization? What do you think?

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