Effect on Workers

Globalization and liberalization have resulted in a large number of people leaving their place of birth to seek better paying jobs in more prosperous countries. Economists think that the influx of labor into a country tends to increase unemployment and depress wages in the host country. The effect of immigrants on wages is a sensitive political issue in most developed countries. Similarly, the widening gap between the wages of more-skilled and less-skilled labor is another negative impact of globalization.

A Bigger Domino

As economies become better linked through globalization and liberalization, they become more dependent on each other. Often, two or more countries thousands of miles apart depend on each other for stability and growth. This creates a vulnerability where a crisis in one country can act as a trigger that pushes the domino, and the crisis can spread rapidly throughout the world. A recent example of the domino effect is the 2008 financial crisis in the US brought by a collapsing real estate market. The crisis quickly spread to Europe, Asia and the rest of the world.

References

Resources

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