Why Globalization Matters

Imagine a world where you are limited to the resources of your country. You have no idea of any of the current events that are going on in the world, and you are not allowed to trade nor do business with any other country. This is what the world would be like without globalization and outsourcing. Globalization and outsourcing connect the world and help boost economies in countries all around the world. Globalization and outsourcing have had positive effects on consumers in Iowa, American corporations who either trade or outsource to Southeast Asia, Southeast Asian country’s labor forces, and governments of Southeast Asian countries.

Iowa Consumers

The first group of people that are positively affected by globalization and outsourcing is consumers in Iowa. Iowa is affected greatly by global trade. Trades increase with consumer choice. With trade it allows people to enjoy products that come from places all around the world and it is easier to get out of season goods. 348,578 jobs are created and supported by global trade in Iowa. Also, when companies like John Deere keep their American factories, and outsource to Vietnam, more job opportunities for Iowa and Illinois citizens open up because the John Deere headquarters in Moline, Illinois needs people to communicate with the Vietnamese factory and relay that information to headquarters. This provides more jobs for Iowa (Business Roundtable, http://www.tradeforamerica.org/why/pdfs/trade/IA3.pdf, May 19, 2011). Lower cost from trade causes more purchasing power for Iowa consumers. This helps low income families. As the trade in Iowa goes up, the unemployment goes down. Iowa’s unemployment is 4.6 percent below the national average. Iowa is also benefited by global trade because farmers from Iowa export a large amount of soybeans to countries all around the world, which includes countries in Southeast Asia. $5.58 billion in soybeans were exported around the world by Iowa farmers. Overall, Iowa government and the citizens in Iowa are greatly benefited by global trade and outsourcing. (Wiser, http://wcfcourier.com/business/local/ article_0b364192.html, 20 Feb 2011)

American Corporations

The second group of people that are positively affected by globalization and outsourcing is American corporations who either trade or outsource to Southeast Asia. Many U.S. companies outsource to Southeast Asian countries because many of these countries have an abundance of resources. The workers in these countries also work a much lower cost compared to American workers. This saves these companies money which can helps them financially, and can give them the opportunity to open up another factory in a different location. Trading is also important for U.S. companies with Southeast Asia, considering that about $203 billion in goods are traded between the two areas annually (Janowitz, http://www.atimes.com/atimes/Southeast_Asia/GH06Ae02.html, 6 Aug 2005). This is good for companies in America and Southeast Asia because they obtain goods that they need, sell products to earn a profit, and it helps companies exchange ideas on how to be more efficient. Companies like Wal-Mart, Nike, and Coca-Cola have outsourced to Southeast Asian countries like Vietnam and the Philippines. This way they can get cheaper labor which saves the companies a lot of money. Also, these companies save a lot of money on shipping because they have outsourced to Southeast Asian countries so they will be a lot closer to their shipping destinations, which also in turn, saves them money. Overall, American corporations who trade and/or outsource to Southeast Asia are positively affected. (U.S. Chamber of Commerce, http://www.uschamber.com/international/asia/ southeastasia/ asean, Jan 2011)

Southeast Asian Labor Forces

The third group of people that are positively affected by globalization and outsourcing is Southeast Asian labor forces. Many American companies are outsourcing to Southeast Asia. This benefits the work force in these Southeast Asian countries because there are more job opportunities. This in turn, can help stop starvation because more people will be employed and can have a substantial amount of food. As of a poll taken by the UCLA Center for East Asian Studies, approximately 206 million people in Southeast Asian countries are employed. There are about 328 U.S. companies that are operating in Southeast Asian countries (NewAsianist, http://www.newasianist.com/us-companies-bullish-on-southeast-asia-despite-some-concerns/, 27 Aug 2010). These companies employ millions of people, which ultimately help economies be boosted since there is more tax on the workers’ salaries, and it increases spending. Workers in Southeast Asia are benefited by the outsourcing of these companies because it gives them jobs. Globalization can also help these workers because the companies that they work for can get new ways to produce products, and also these companies can learn how to better improve the working environment for their employees. Ultimately, the labor forces of countries in Southeast Asia are greatly benefited by global trade and globalization. (UCLA Center for East Asian Studies, http://www.international.ucla.edu/eas/statistics/wb-labor.htm, 2005)

Southeast Asian Governments

The fourth group of people that are positively affected by globalization and outsourcing is Southeast Asian country’s governments. The governments of Southeast Asian countries thrive because of the strong economies that succeed with globalization. There are a lot of products that are exported out of Southeast Asian countries to just the U.S. alone, nearly $120 billion. All of this trade means that they are able to highly tax all of their imports, which makes their government billions of dollars. These countries’ governments are most likely to be more stable because their economies are stable and can support the government and citizens without greatly going into debt. Also, there are thousands of American companies that have outsourced to Southeast Asia, like Wal-Mart, John Deere, and Nike. This creates a lot of job opportunities within Southeast Asian countries. Therefore, with all of the new incomes being created, the government can tax these incomes, which gives them even more money. Overall, Southeast Asian countries are greatly benefited by global trade and outsourcing. (Kim-See, http://forge.fh-potsdam.de/~IFLA/INSPEL/01-2kich.pdf, Feb 2005)