Globalization's effects have been overwhelmingly good. Spurred by unprecedented liberalization, world trade continues to expand faster than overall global output, including a wave of productivity and creating millions of jobs worldwide. Globalization has raised the living standards for many. It has also made life more difficult to those unskilled workers in the United States. .
After reading the article entitled Æ' ±Trade and Income Distribution: The Debate and New EvidenceÆ' from the Institute for International Economics (September 1999), I learned that the decline in United States workersÆ' wages is much more severe that I had previously thought. Though wages for unskilled labor have increased in the last 25 years, this is mainly due to inflation. It actuality, the value of the wages has dropped dramatically. One solution to this problem would be for industries to shift to unskilled labor. Being in the nationÆ' s best interest this shift would not only increase unskilled labor employment, it would also free skilled workers to apply themselves on increasing technology and take jobs that require higher education. Although it is better to Æ' ±buy AmericanÆ' rather than from US corporations with foreign direct investments in other countries, increased trade protection will not benefit American workers or firms in the long run. Little, if anything, would be gained for unskilled wages through the avoidance of such liberalization, while its potential overall economic gains would be foregone if liberalization were to be halted. .
Products that were formally produced in the US are now more frequently imported. This trade reduces the relative price of the imported goods using unskilled labor. Foreign direct investment in other countries usually produces a less expensive product, resulting from cheaper unskilled labor than that in the United States. Though this costs American workers their jobs, it benefits the consumer by granting lower prices for the same product.
