As well, workers in industries most exposed to competition from Chinese imports are found to have experienced an average income decline of over $500 per annum against annual earnings of $40,000. The research estimates that, without the rise in Chinese imports, there would be 560,000 extra manufacturing jobs in the US today. Recent research has found that low-skill workers in the US have been made significantly worse off by the transfer of manufacturing activity to China. As developing countries such as China have increased their engagement with international trade this has caused a large-scale switch in the location of production of manufactured goods – from developed to developing countries. Many types of manufactured goods mainly require relatively low-skill labour to produce (especially goods such as textiles and footwear, motor vehicles, electronic consumer goods).ĭeveloping countries, where wages paid to low-skill labour are much lower than in developed countries, are able to produce these manufactured goods more cheaply. China produces 25% of manufacturing output and the US only 15%.ĭifferences in labour costs between the US and China explain much of this transition.
Today that position has completely reversed. At that time China produced only 5% of global manufacturing output. In the early 1990s the United States accounted for 30% of manufacturing output, retaining the position as the world’s leading industrial producer that it had held for almost a hundred years. Judging by the dramatic change that has occurred in the global distribution of manufacturing output in the past 25 years it’s easy to see why these workers should be so concerned. Look no further than the United Kingdom’s exit from the European Union and the rise of protectionism in American and Australian politics to see the disenfranchisement of low-skill workers with the effects of international trade.
Impacts of globalization on workplaace series#
What’s really going on? Our Globalisation backlash series offers some answers.Ĭoncern over the employment consequences of globalisation is again driving political debate. But right now some politicians and their supporters are arguing it simply increases inequality. Most experts say globalisation spreads wealth, bringing people out of poverty and nations closer together.