Why Manufacturing Is Important?

The fact of the matter is, “The existence of global poverty helps to ensure the wealth of affordable goods for western consumers.” (Eglitis 224) The supply of these affordable goods and products that are so readily enjoyed by western consumers is a direct result of the benefits gained from participating in a global manufacturing

They note the trend of unequal wage growth between low and high skilled workers. This is in part due to manufacturing and other traditional low skill industries were increasingly transitioning to new high skill jobs, which led to disproportional wage growth. Depending on the nations domestic labor markets, they observe across the advanced economies a combination of lower earnings and higher unemployment. However, most studies linking this trend to trade find that it only has a modest effect on wages. By broadening the scope of their investigation to other influences of globalization rather than purely trade, namely capital mobility and its impact on domestic labor markets which are forced to adjust and work at global rates or lose business. In addition, the mobility of labor poses changes through replacing domestic labor. Lastly, the two authors emphasize that governments should not seek to stop globalization but to address underlying factors, such as increasing education and training for displaced

Since companies are moving jobs to China and India, their economy benefits a lot by having more opportunity in searching for jobs while middle class Americans suffer from lack of jobs. In the article “The Rise of the Middle Class-Just Not Ours” by Gillian Tett, he says that in the past decade, “Brazil, Russia, India, and China are thriving as jobs flow into their counties from the West and their education and infrastructure improve” (Gillian 1). He states that due to corporations investing in other countries, they are gaining better education along with infrastructure as their income rises and lifestyle improves. Corporations are focusing more in different countries rather than America because in some countries, they have advanced in education and in technology whereas the American people are lacking it a bit. Corporations are uplifting middle class in different countries while they are destroying the middle class in

The United States is no longer a leader for manufacturing and China is currently in their ‘Industrial Revolution’ economy. Manufacturing jobs have been exported overseas, that has decline in the leverage to unionize labor (Uchitelle, 2018). The auto industry alone has been drastically hit, with the 2009’s “too big to fail” stimulus package to save the industry.

Mankind’s interrelation with manufacturing systems has a long history. Nowadays we see manufacturing systems and their applications as systems in which goods are produced and delivered to the suitable places where we can obtain them. We are conscious of the fact that everything we consume or obtain is produced at some facilities. We are also aware of the fact that many components involve at these processes such as laborers, capital, and machines. Nevertheless, majority of people might not realize how these processes have developed all along this time and changed our daily lives surprisingly. Manufacturing, as a crucial part of the industry, has always had overwhelming impacts on our life habits, societal

China is facing difficulties both inside and outside. Since China cannot regain its advantages, the only choice is transiting away from low-end manufacturing. The days of cheap, endless labor is limited, but has not ended. China still has time to invest in research, design and development and train skilled workers to create China’s own high-tech products and brands. If China could relax the One-Child Policy and invest more on children’s education, Chinese manufacturers could have more skilled workers to innovate and produce their high-tech products. China’s manufacturing is at a

According to Lamb, Hair and McDaniel (2011), "globalization has created a vibrant middle class that has elevated the standards of living for hundreds of millions of people." This according to the authors is more so the case in developing countries like China. Given the role they play in international trade, multinational firms must position themselves to benefit from the emerging middle class primarily driven by globalization. As people's living standards rise, so does their disposable income. An increase in disposable income leads to an increase in purchasing power and a subsequent increase in the demand for goods and services. This could impact positively on the bottom line of the said multinational corporations especially given that a vast majority of them derive a significant chunk of their total revenue abroad.

In the past 20 years’ income inequality has become a major issue in particular within the United States (US) where a significant income gap has occurred. This is exemplified by the US Gini index (GI), a measure of income inequality, which has risen from 43 in 1990 to around 47 in 2010 and is continuing to trend upward (David Moss, 2011). This has now become a problem that both develop and developing nations face. The main causes being globalization and technology. In developed countries globalization has increased cheap foreign imports with technology making importing extremely cost efficient. There’s also the outsourcing or the replacement of low skill jobs with newer technology. These two processes have contributed to higher profits for executives while low skill workers are losing their jobs by the thousands. In developing countries globalization has led to low skill workers having to compete in cheap labor markets dropping their wages even further. Technology in these developing countries has also increased income inequality with their lower class unable even be literate enough to learn newer technology. Therefore, inequality damages economies and workforces on a world scale

One of the key drivers of many first world economies would be manufacturing; the United States is no different. Over the years, billions upon billions of dollars have been pumped into the manufacturing process in order to improve the associated technologies and bring down costs. There are numerous established manufacturers in the country today; you can view their products in convenience stores, supermarkets and pretty much every other place of business.

This exerts downward pressure on wages especially in developing countries which to this day effectuate the production and manufacturing stages with small added-value in the new division of labour with the bulk of higher added-value production being executed in developed countries. The disequilibrium and structural unemployment as well as the global trend for offshoring only exacerbate the lowering of wages.

Q1. Based on the 2004 statement of profit and loss data (Exhibits 1 and 2), do you agree with Water’s decision to keep product 103?

Although these new technology, more like companies, enter a new land looking for cheaper work force, it stills gives the country a huge boost in the demand for low level skilled workers. In the article “In what way has globalization affected unemployment?” Marsida T. Najdeni said that “What used to be done by low skilled workers in the U.S., it is probably getting done in sweatshops across Asia. Nonetheless, these sweat shops are all these Asian workers from the other side of the world have to survive. The famous Cambodian sweatshops to us might be unimaginable, but to the people living there is the only way of making their daily bread.” meaning that the gain of these countries mean losses to some already developed countries, like the US for

If businesses don’t export jobs overseas, they need to find new ways to remain competitive in the global markets. This can come in the form of pay cuts for employees, which also harms the economy since there is less disposable income (businessweek.com). Again Mourdoukoutas (2011) offers his support by stating globalization can lead communities to escape the unemployment trap by devaluating currency and raising trade barriers. China currently employs the currency devaluating tactic to maintain their edge in American markets. This makes American products more expensive to obtain in China, as opposed to their inferior, cheaper products. This causes American based businesses to seek new creative ways to lower production costs to remain competitive in Chinese markets.

Globalization can be seen as a major threat for manufacturing jobs in the developed world, however, can also be a benefit for developing world citizens who receive thousands of jobs a year although they don’t receive a high salary. Maurice Allais, a French economist states that this unemployment, of course, has only been able to develop because of the existence of low salaries and insufficient flexibility in the labor market (April 10th, 1999). This indicates that globalization has jeopardized Western countries jobs because companies are moving their establishments to developing countries where they don’t need to pay employees as much and where land is cheaper so overall businesses benefit from this. Also, employees in the developed world are at risk of becoming redundant as they are susceptible to face pay cuts in jobs. Employees are less skilled in the developing world as they don’t receive the benefit of an education like developed countries do. So a company may want to build factories in these countries because environmental laws aren’t as strict. Establishments in these areas provides promising jobs for the local people and allows them to learn new skills, however they are set on minimum wage which in developed world countries, this would not be enough to live on, wherein third world countries this is still a low amount so this is not enough to bring them out of poverty meaning that the only one who benefits from this is the company. Although there have been several arguments against exploitation and oppression, the majority of developing countries do not have existing laws which take minimum wage

To begin with the benefits of trade liberalization, while country starts to open the country borders for foreign trade with lowering tariffs and import restrictions, basically, the gains from import and export will be rise. Moreover, with the allowance of trading for foreigners who bring with them technology, investment and production skills inside borders of the country, country will achieve to fill up the lack of production skills and increase the amount of manufacturing goods, job opportunities for community, while sometimes foreign firms will benefit only from low labor costs. In the other words, a country will start to earn from comparative advantage as sector specialization and exporting goods while making sectoral transformation due to trade liberalization continuously which is also explained with an expansion of investment on research and development. Additionally, the industrialization degree of the manufacturing will be affected positively by Foreign Direct Investment (FDI) according to the country’s sector of comparative advantage. These processes can cause to make new job opportunities, boost in income per capita, advantages for consumers. All in all, these benefits can be listed as, (Arsalan Hasan,