Question

Consider the role of resources in international trade. Do you believe the rise of globalization has caused the outsourcing of manufacturing jobs within the United States, or is this a natural progression due to the technological era we are in? What trade legislation has affected items that are “Made in America”?

Answer 1

Globalization is a worldly phenomenon which means integration of economic activities all around the Globe. The term economic activity signifies all the process which are somehow involved in the production, distribution and consumption of various goods and services.

Now in order to facilitate such humongous activity at a global level, we need a lot of resources and but we also know that resources are scarce and the need to be properly managed and optimized. Therefore it is a very common practice for Multi-National Companies(MNC) to outsource jobs or services which they can process at a cheaper rate.

Consider the example of CHINA.

It is a huge country with ample resources and a large population, thus it is the manufacturing unit of the world. Consider anything there are chances that those things were made in CHINA.

So any MNC will like to outsource it's manufacturing to CHINA as it will be cheaper and they will be able to maximize their profit. So now things which were earlier produced in the US are now produced in CHINA at affordable prices. Thus by opening its door for trade CHINA is not only expanding its foot on Global trade but indirectly it is taking away the jobs in the US.

Now coming to the terminology "Technological advancement". Every day something new is happening around the world in terms of Technology because if you see without technology most of the things which we do wasn't possible to do with such ease. Technology is everywhere around you and day by day it is increasing its footprint in the human life. Technology is the essence of development but we cannot say that outsourcing of jobs is a natural progression just due to the technological era we are in.

Outsourcing of manufacturing jobs depends upon a lot of things like

1. availability of resources.
2. cheap labour.
3. low tariffs.
4. access to transportation.
5. technological advancement(single aspect only)
6. government policy
7. investment

Thus you can see there are a lot of factors that are responsible for the outsourcing of manufacturing jobs and the US is losing in most of these factors to its competitors.

Cheers & keep reading !!