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Globalization and Immigration

This analysis explores the effects of globalization and immigration on American labor, based on Thomas Friedman's concept of a "flat world" and Adam Smith's insights on labor division. As advancements in telecommunications and transportation have expanded markets, the influx of foreign goods and services raises concerns about the pricing out of American labor. The ongoing trend of offshoring and the declining wages of low-skilled Americans are examined, alongside the increasing ratio of non-production to production workers within U.S. manufacturing, revealing a complex global phenomenon.

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Globalization and Immigration

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  1. Globalization and Immigration

  2. “THE WORLD IS FLAT” THOMAS FREIDMAN • “The greatest improvement in the productive powers of labor…seem to have been the effects of the division of labor….(and) the division of labor is limited by the extent of the market.” Adam Smith, The Wealth of Nations • Improvements in telecommunications and transportation have vastly expanded the markets for goods and for labor • Cheap foreign goods and services are good, but, isn’t American labor being priced out of the market?

  3. OFFSHORING IS GROWING

  4. Relative wage of Nonproduction/Production Workers, U.S. Manufacturing

  5. Why have the wages of low-skilled Americans fallen? • If its only increased competition from foreign workers that is driving the wages of Americans down then firms should be taking advantage of these lower wages for unskilled labor by increasing the ratio of unskilled to skilled labor in their operations. But the opposite has occurred. The ratio of non-production to production workers has trended upwards in American plants. • This is a world-wide phenomenon.

  6. A World-Wide Phenomenon

  7. MEXICO’S RELATIVE WAGE HISTORY LOOKS LIKE The U.S.

  8. Demographic Overview

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