Question

In: Finance

Is it fair to workers of developed countries when companies shift work to lower wage countries?...

Is it fair to workers of developed countries when companies shift work to lower wage countries? Explain.

Solutions

Expert Solution

The emergence of Globalisation has led to the opening of the gates between the developed nations and the developing nations.

The developing nations and the developed nations are equally enjoying the benefits of the increased growth which has been brought in due to the increased pace of globalisation which has contributed to the increased trade between them. Imported food products, automobiles, electronics, apparels etc. are in great demand by the population of the developing countries, leading to a rise in production of these goods and services produced by developed countries' companies.This has led to increase in the GDP and income of the developed nations as employment opportunities have also increased for the people of the developed nations. Due to the availability of cheap labour the developed nations have started to set up manufacturing units in the developing nations to reduce the manufacturing costs and increase profits.This has led to an increase in pollution levels also due to to set up of production units in these nations. Yes definitely this has led to a lose of jobs in the developed countries as the developed countries our outsourcing.

yes there has been loss of manufacturing base in the developed countries and also exploitation of the people in the developing nations to extract work from them at low wages.Not only the manufacturing sector but also the service sector is shifting base to developing nations. Therefore, globalisation has played a negative role on the employment scenario in developed countries. Globalisation may have played a role in the emergence of poverty in developed countries, when people in the lower income group experience long-term unemployment, they may slip into poverty


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