Global Stratification and Local Economies

Global stratification is an inevitable process that has both positive and negative impacts on the local cultures. One of the key benefits of globalization is providing citizens with career opportunities. By creating jobs for the people, especially for those living in Third World Countries, multinational corporations establish a competitive job market for the citizens. Not only do foreign companies contribute to the local economy; but domestic companies also create jobs with the support of the local government. The government passes the protectionist legislation, paying the bailout to the companies to maintain job opportunities for its citizens (Harris, 2012). Since lowering the unemployment level is a vital task of the government, increasing both domestic and foreign companies’ presence on the market is crucial for a healthy economy.

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Citizens are not concerned about the national identity of the company they work for but rather about the number of career options available to them. With the introduction of foreign business, many jobs are being opened. When South Korea’s Kia assembly plant was opened in the Alabama-Georgia borderline, some forty-three thousand jobs were opened (Harris, 2012). In the age of globalization, multinational companies contribute as much to the domestic economy as the local ones do. By opening thousands of jobs and directly investing millions of dollars in the US economy, multinational companies like Honda and Toyota make a significant contribution to the economy of foreign countries.

Global stratification can also hurt the local economy. In the United States. stratification is done by wealth and power, which ultimately led to an influx of immigrants. Many jobs, especially menial ones, are being taken by the immigrants. Secondly, big multinational corporations force smaller companies off the market. With the dominance of companies like Ford, General Motors, Nike, smaller competition is being overtaken or made bankrupt with the presence of huge corporations. A negative impact on small and medium-sized businesses ultimately leads to a gradual decline of the local economy.

It is important, though, that in a global economy local remains an important aspect. In his research, Herod (2012) mentions two cases where local disruption causes a halt at production. One of them is the fact that when General Motors tried implementing a “Just-in-time” technology, a strike at one of the plants caused the full stop of production and tremendous losses. Previously, companies used to stockpile the necessary parts at the warehouses. At some point, managers decided that they were losing capital on these idle parts and decided to turn to another model of the supply chain. “Just-in-time” meant the delivery of parts just before the production at the assembly starts. In June 1998, the United Auto Workers (UAW) demanded better conditions for workers at the plant. When they were denied that, some 3400 workers walked off the job, stopping the entire production of GM (Herod, 2001). This ultimately led to a loss of $2.3 billion for the second and third quarters, 1998.

Increasing the global presence of a company leads to the profitability of the business effectively raising the revenue and profits. The government increases the number of job openings employing its citizens and lowering the unemployment rate. Citizens get better conditions within the competitive job market. By creating jobs and raising the company’s presence in a foreign country, everyone is a winner within this system if it is properly regulated.


Harris, J. (2012). The World economic crisis and transnational corporations. Perspectives on Global Development and Technology, 11(1), 168-181.

Herod, A. (2001). Labor internationalism and the contradictions of globalization: Or, why the local is sometimes still important in a global economy. Antipode, 33(3), 407-426.

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