Abstract
The United States has experienced a decline in the number of well-paid manufacturing jobs requiring no more than a high school diploma, as well as of middle-income knowledge economy jobs. Globalization is, indeed, as many suggest, partly responsible for this problem. Other factors have, however, played an equally, if not more, significant role. Technological advancements, the decline of labor’s bargaining power, and the sharply increased financialization of the economy are among the factors which have contributed to the loss of manufacturing and service sector jobs, the creation of new types of tasks for which there are not enough qualified applicants, and a widening of income inequality. With the help of the Pressure-State-Response (PSR) system, we discuss each of these four factors taken individually and collectively (i.e. the Pressure), which result in the outcomes or States. The Responses discuss actions taken to address the negative effects of the P-S. We also propose responses which might be considered, and contend that training/retraining programs need to be redesigned, corporations need to play a more active role in dealing with societal disruptions, and that governments have a crucial role to play in ensuring economic and social stability. It needs to be emphasized that, particularly in regard to technology and the mutually reinforcing relationship between technology and globalization, which has transformed the nature of work, future impacts on employment and inequality) may well be even more powerful than in in the past.
Highlights
A Framework for AnalysisOver the past three decades the process of “globalization”, broadly defined as the rising interconnections among, and integration of, nations through trade, travel, telecommunications, and other means (Stiglitz, 2007; Bhagwati, 2007; Steger, 2017), has evolved, and expanded to include numerous countries, products/services, and activities
We argue that the decline in the number of middle-income, knowledge economy jobs in the United States and other developed nations is, partly an outcome of globalization, but other factors have played an if not more, significant role
The conceptual model developed in this paper draws from various strands of the literature and seeks to provide an analytical, action-oriented framework to deal with the complex challenges which developed nations such as the United States (US) face today
Summary
Over the past three decades the process of “globalization”, broadly defined as the rising interconnections among, and integration of, nations through trade, travel, telecommunications, and other means (Stiglitz, 2007; Bhagwati, 2007; Steger, 2017), has evolved, and expanded to include numerous countries, products/services, and activities. As firms moved functions and processes offshore to reap location advantages, work was generally assigned to countries or regions marked by low costs, where the governments provided better facilities, and labor with superior skill levels was at hand (Sahoo, Dash, & Nataraj, 2010; Guthrie, 2012). This shifting of the locus of task performance and investment with a view to increasing profits generated by transnational corporations (TNCs) has often resulted in declining employment in developed nations across a variety of industries, starting with low value-added manufacturing, but gradually expanding to include higher skill-level jobs both in manufacturing and in services. Technology and innovation have been the most powerful forces, directly and indirectly, in their impact on societies, and the relations within and among them. (Galbraith, 2012; Financial Times, 2016)
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