Globalization is the newest for of power to spread all around the world since the time of imperialism. Globalization has brought about numerous changes around the world increasing movement of good, people, labour and services around the world. Although these changes have brought about unimaginable development economical, and socially the have also brought about unimaginable social and economic inequality in the united states of American, which have resulted in deteriorating wages and working condition. This has happened thorough various ways
First, is the global dispersion of economic activities, which encourage outsourcing factors of production from other countries (Poot, 2004). Some companies and industries even shifted their plants and premises to foreign countries such as chain where factors of production are cheaper compared to U.S. This shift involves transferring employment opportunities out of America to other counter’s citizens, which consequentially limits employment opportunities back in the country.
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Second, the inequality comes about as are a result of the asymmetrical relationships between employers and workers. The increased mobility of factor of production such a labour made it easy for employers to get cheap labour else where (Blossfeld, 2008). The immigration of people from other countries to America also compounded imbalance of power between employers and their employee. With the immigrants willing to take any payment offered to them, the American employee find it is difficult to negotiate for reasonable pay from their employers. Also, the employers have the power to withdraw employment at any time (Blossfeld, 2008).
The growth in buyer-driven commodity chains is yet another factor for the growth of the inequalities. In buyer-driven commodity chain, producers set systems of distribution and production where by the production is subcontracted to small produces working under extremely competitive conditions (Heintz, 2006). The small producers, especially in, developing countries are labour intensive but employee low cost labour (Heintz, 2006). As s result, the employees of such firms end up earning less compare the brand owners. This further increases inequality.
In conclusion, globalisation opens up the world to dispersion of economic activities, asymmetrical relationship between employers and workers, and the growth in buyer-driven commodity chains, which increase economic inequality in wages and working conditions.