Many contemporary observers believe that we have entered into a new era of globalization. This can be seen through the rise of a technologically connected world where information can be exchanged faster than ever, and the growth of multinational corporations that control wealth on a grand scale. While this has led the world economy to surge at an exponential rate and created what many of us now treasure as a world dictated by state of the arts entertainment and technology, globalization has had many adverse effects as well. Even though there are advocates of the new world economy that argue that globalization has helped create lasting social change and improved the environment, ultimately I will illustrate that globalization has created a society with real winners and losers, and damaged Earth’s ecological cycle, putting stress on the environment.
The Human Side of Globalization
The flashy benefits are contrasted by the human side of globalization. Particularly, low costs of labor in developing nations are exploited by multinational corporations as they outsource the more labor-intensive manufacturing jobs to regions outside of their headquarters, to lower their marginal costs for labor. Let’s take the Japanese clothing company, Uniqlo, for example. Recently, world-renowned tennis player, Roger Federer, was criticized for ending his partnership with Nike and partnering instead with Uniqlo. Why? Researchers have discovered that Uniqlo laid off two thousand Indonesian workers with unpaid wages and no severance payments. Further analysis also revealed that these workers had been doing unpaid overtime. This is a clear example of what researchers call global labor value chains. Multinational companies are not only able to take advantage of low wages in some countries, but they are also able to achieve higher productivity (lower marginal costs and higher marginal productivities). Another consequence of such outsourcing has been a rise in unemployment domestically, which has made it even more difficult than before for immigrants to find jobs.
One may ask, what can be done to solve this? Many workers’ rights activists and critics of outsourcing have called for an international minimum wage which would incentivize companies to produce goods domestically. Yet, economists, such as Tim Worstall from Forbes, suggest that such a proposal ignores how wages are determined in a labor market and unforeseen consequences of consolidating the labor market on the world stage. This international minimum wage would be way above the GDP per capita in some countries and way higher than the statistic in other countries, forcibly creating an even wider disparity.
The Climate and Globalization
The effect of globalization on our environment in terms of sustainability has also been debated by scholars. Globalization has in fact led to an increase in the consumption of many products which has led to an increase in the transportation of raw materials from one place to another. Before the surge in connectivity between world economies, a larger proportion of the population consumed locally grown foods and locally produced products. Since then, people have started consuming products that were produced all over the world which has contributed to increasing pollution levels and landscape intrusion. One modern example of this is Amazon’s prime delivery service. Climate change is also closely correlated with globalization. In research done by Andrea Maneschi at Vanderbilt University, she discovered that since globalization has ushered production on a global scale it has led to an increase in emission of greenhouse gases (GHGs) not only in the manufacturing sector but also in agriculture. On top of this, besides the lower cost of labor in many developing nations, another reason to outsource labor has become the looser environmental regulations in those nations. Critics of outsourcing claim validity in the “race to the bottom theory” in that by allowing rich-country companies to invest freely in developing nations that don’t have high environmental standards by transitivity this means that globalization is forcing first-world countries to lower their environmental standards as well.
Global Health and COVID-19
Scientists have also found links between globalization and the pandemic that has changed our lives. In research conducted by Anthony J. McMichael at the National Centre for Epidemiology and Population Health at the Australian National University, he found that globalization creates a sort of domino effect on the environment where globalization affects the climate which also affects the health of humans and other life on earth. In relation to the current COVID-19 pandemic, McMichael claims interconnectedness through globalization makes it easier for diseases to spread to new regions.
The Environment and Globalization: Proponents
There are also those that believe that globalization might actually have helped the environment over the years and that the process of deglobalization may lead to the opposite effect proposed by “race to the bottom” theorists. In fact, they argue that globalization has led to many unique innovations, as scientists from numerous nations have collaborated to invent more efficient systems of transferring energy which multinational corporations can transfer and install in countries with currently low environmental regulations. In regards to the discrepancy between nations having different environmental regulations, many argue that environmental public awareness has spread largely because of globalization. Moreover, the trend toward globalization empowered a variety of supranational organizations whose interests and activities went around the world. An example of this is the World Trade Organization, who have continuously made “green provisions” to conserve natural resources in trade. Parallel to these institutions have been the emergence of NGOs like Greenpeace that expose the world’s environmental problems while lobbying for change on the global stage.
With the domino effect that globalization creates, it is a challenge to manage the process in such a way that promotes environmental sustainability, but also encourages liberal economic principles and human development. A solution may be a greater role on behalf of the United Nations to heighten environmental standards as requirements to participate in General Assemblies and Security Councils; yet, this may set back economic development in many nations that contribute negligible amounts of GHGs to the atmosphere. Overall, as these issues come to the front of the world stage, there is controversy over the extent to which globalization affects our world.