Discuss the likely impacts of Globalisation on consumers, workers and the environment. by Mark B (U6th - A-level)

Globalisation refers to the increasing international interdependence of economic agents. It is concerned with the increasing integration of economies across the world. Globalisation has arguably brought benefits to many consumers and workers, however has also incurred a negative effect on some consumers, workers and the environment.

Many consumers have benefitted significantly from globalisation. The classical view is that globalisation has created competition which has led to a reduction in prices. In other words, consumers have had a far greater market to choose from, and where businesses have kept costs low: such as by taking advantage of low-pay workers in 3rd world countries, prices have been kept low. This has particularly been the case for MNCs. A new rail link that runs from China to London shows how China is making use of the Western market to sell goods cheaper than Western markets are able to offer. This means that consumers in the Europe are spending less on goods & services - having a positive effect on consumers in Europe. However, more recently academics are arguing against the benefits of globalisation as suggested by extract C. Extract C talks of currency movements felt by the UK sterling following the months after Brexit that is creating “uncertainties” worldwide. Where uncertainty creeps in, so too does a loss of investment as businesses choose to locate elsewhere as it would be a safer bet for them to do so. This may affect the balance of trade as exports will decrease and imports will increase. This, alongside a decline in investment will lead to a contraction in Aggregate Demand which will increase the general price level which will have a negative impact on consumers as they will have to spend more money for less value.

There are multiple arguments for the effects of globalisation on workers. Over the last 20 years, the number of people living in extreme poverty (less than $1 a day) has halved. Extract C refers to the classic view of free-trade theory. This states that “imports costs jobs” and exports “generate new ones”. Therefore, does the peak of world exports in 2016 as stated by Extract C (line 2) suggest that jobs will be lost in the future? On the one hand, globalisation has benefitted workers significantly. MNCs may employ many local workers - reducing unemployment and economic inactivity. MNCs also provide skills and education for local workers. There may also be a technology transfer which could lead to “leapfrogging”. This will improve the standard of living for workers. The MNC investment into the host country could also have a positive multiplier effect whereby more jobs are created, a greater tax yield is gained by the government leading to an improvement in healthcare and education which will improve workers standard of living. For workers, the MNCs salary may also be greater than the local company pay - advantageous for the workers. However as questioned by extract C, “could globalisation reduce poverty in an equitable fashion?”. As MNCs aim to achieve the highest profit they use workers in third-world countries as the Labour force is cheaper and there are no strict labour regulations. However, this often creates sweat-shop type work places where working conditions are poor. Workers have to work long work hours, on a low salary and often in crammed environments that in the western culture would be deemed unsuitable for working conditions. Workers in MEDCs such as the UK also experience changes due to globalisation. As workers from abroad migrate to countries, local workers may experience difficulties in finding work as more skilled workers migrate into MEDCs to look for work. This can increase unemployment which is perhaps why in Theresa May’s Brexit speech she talks of wanting to opt out of the free movement of people to work and settle in the UK. A growing complaint for many in the UK.

Environmental impacts can be seen around the world, and would appear to be directly correlated with the increased globalisation in recent years. 99% of Scientists would argue that Climate change has been increasing from the impact of humans, an argument that 1% disagree with; including Donald Trump. Extract C talks of the powerful era of impacts between 1980 and 2008. During this era, globalisation is arguably causing a significantly increased demand for oil. As more people travel around the world using airplanes, and development leads to the increase in vehicles on the roads in particular in LEDCs; the effects on the environment are being seen. For example, we are witnessing a severe melting of ice bergs in both the arctic and Antarctic - causing the extinction of many species. Deforestation, in particular in rainforests, is being seen as the TNCs seek to minimise costs by taking advantage of the source of cheap wood. Other environmental impacts include the mining of scarce resources in Baotou, inner Mongolia. As TNCs spread their markets across the world the demand for smartphones has been significantly on the rise. A necessary component of smartphones comes from Baotou where the city has turned into a site of mining with refinery towers and endless electricity pylons, but has also become a location of poor working conditions for those involved. It is hardly surprising that extract C talks of the difficulties facing politicians in applying policies to future global landscapes, when the environment has faced such significant changes due to globalisation. However, there have also been some positive environmental impacts seen by globalisation. A unity of countries seen by the Paris Climate deal shows how the globalised world can act to solve problems together. Although, arguably without globalisation we would not be facing the environmental problems that we face today. The impacts on the environment can be seen by the increasing extreme weather events such as the most recent hurricane Irma. As well as impacting the environment, these events also impact consumers and workers - where natural disasters cause a break in the supply chain.

Globalisation has brought change to consumers, workers and environment. Depending on who you are and where you live; globalisation has impacted consumers and workers in either a positive or negative way, in some cases a combination of the two. For the environment, there is little argument to support anything other than the negative impact globalisation has had.