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Should We Really Push the Made In America Act?
Every day our world moves more toward globalization. Globalization is the movement toward greater economic, cultural, political, and technological interdependence among national institutions and economies. Almost everyday you use products and eat foods that were not made or grown in the United States. Some people see this as a bad thing: taking jobs away from our home country, increasing unemployment, and exploiting workers in undeveloped or developing countries. I see these as reasonable arguments against globalization, but my opinion is that globalization is critical in the world today in order to be seen as a competitor among nations. The United States has been seen as a powerhouse in terms of economics and business since the end of World War II. To remain a powerhouse, the United States must maintain their hold in the global market.
One of the arguments against globalization is that it takes jobs away from our home country. While this may be true, we work for so much more in our country than in developing countries. Our minimum wage is $7.25/hour, while this amount of money would be a fortune for those in developing nations! Getting paid $7.25/hour in Taiwan would be the same as 1,679.97 Taiwan dollars. (This is assuming an 8 hour work day at $7.25/hour no overtime rate.) This is the reason we can buy products that have been manufactured in China for next to nothing. If you were to walk into a store today and see a product from China, or another developing or low-wage country, and one from the United States, you would pay more for the product from the United States. The reason behind this fact is because the more you must pay people to make a product, the more you have to sell the product for.
People compare China to the United States more than other nations because when China was forming their economy they went with what is called export-oriented. Export-oriented is when the country makes products that they know the world needs. The opposite of export-oriented is import substitution. Import substitution is when a country makes products that they know that they need. Since China focused on making things for everyone else, they acquired a large consumer base of other nations. China is controlling their currency to make their exports very cheap for countries. This is the main reason all of our products are made in China.
I know that I hear a lot about about people complaining about high prices of products. It is ironic that many of these people also are the ones complaining about manufacturing abroad. This is highly hypocritical, considering it would be impossible to manufacture low-priced products in the United States at a cost that can compete with products that are manufactured abroad. Unless people work for less, which is legally impossible with minimum wage laws, or machines take people’s jobs, which will lead to unemployment. It can really never be a win-win situation, unless the thing being manufactured does not need much labor to be made.
To move onto the second argument of increasing unemployment, unemployment is mostly just party of the business cycle. The business cycle is recurring periods of growth and decline in an economy’s output. and real GDP (Gross Domestic Product). The Gross Domestic Product is the measure of production within a country’s borders. There are four phases of the business cycle: recession, trough, recovery, and peak. The period we are in now is the recession phase. The recession phase is a period of time in which real GDP (Gross Domestic Product) falls. When GDP falls employment falls as well because there is not as big of a need to employ as many people because the demand for the product is also down.
Recessions are only one phase of the business cycle. Recessions are followed by recoveries, that lead into peaks. Recessions are the main reason for today’s high unemployment, not production being sent abroad.
Another major argument against globalization is that it exploits workers in developing countries. One of the major concerns with exploiting workers in these countries is that they do not get paid enough. This is not true because what we consider “enough” money is a fortune for workers in these countries. The dollar is considered more valuable than many of the world’s currencies. For example, one dollar will get you roughly 20,000 Vietnamese dong. When conducting research, I found a website that was criticizing Nike for paying their Vietnamese workers $1.60/day and their Indonesian workers $2.46/day. Sounds pretty bad, right? Well, that $1.60 converts into 33,448 Vietnamese dong, and 21,340.50 Indonesian rupiahs. Also, in my research I looked for how much necessities cost in the currencies. In Vietnam it costed 10,000 dong for a cup of coffee. This seems like a lot, but how much is our minimum wage? How much coffee could we buy if we only worked for one day. If they worked for five days they could buy many things that they need or want. Just as we save for things we would like to buy, so o they.
Globalization is providing developing countries with a means to get a GDP and provide employment for citizens. We always see how organizations and charities would like you to donate money and necessities to these countries. Just as the Chinese proverb says- “Give a man a fish and he eats for a day, teach a man to fish and he eats for a lifetime.” With globalization developing countries can provide for themselves.
Without globalization you would not have many of the foods and products that we eat and use every day. The absence of globalization would also have the impact of paying much more for products that we see as relatively cheap.
I do not believe that we should push the “Made In America Act.” We would pay more for products, be taking away some countries means of providing for their citizens, and taking away many citizens in developing countries a means to provide for their families and better their way of life.