StudyCorgi Business & Economics

Globalization Impact on Trade and Employment

According to research, the rate of globalization across the world has escalated at an alarming rate since the turn of the century (Feasel, 2018). This observable fact has been influenced by factors such as technological advancements, economic empowerment, increased access to education, and improved relations between countries. One of the notable effects of globalization is heightened trade liberalization and opening up of global labor markets.

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Reports indicate that liberalization of trade often has considerable effects on various groups with regard to wages, availability of job opportunities, and the overall cost of living. Although studies have shown that trade liberalization often has a negative impact on wages, experts argue that it is important to also focus on the positives of increased employment opportunities that come as a result of the same changes (Krist, 2013).

In addition, reports indicate that the negative effects on wages are not spread across the wage structure but only concentrate on specific fields and industries. According to the International Labor Organization, globalization has enhanced the rate of employment across the world (Ericksen, 2014). This is an indication that trade markets have opened up across the world, thus increasing the rate at which goods and services are exchanged. It is evident that globalization has improved the level of trade across the globe, a phenomenon that has resulted in an increase in the rate of employment due to emerging markets.


A study conducted a few years ago in India to establish the impact of globalization found out that the rate of trade expansion was increasing every year (Feasel, 2018). According to experts, globalization influences countries to review and reorient their trade policies in line with the emerging global trends. For example, the increased uptake of technological tools such as computers and the internet have enhanced the effectiveness of delivery systems across all sectors of the economy. In respect to this global trend, many countries have revised their trade policies in a bid to incorporate technology (Krist, 2013).

This has in turn created more job opportunities because businesses, as well as both government and non-government organizations need people to work in their information technology departments. Economic experts have faulted the negative impact of trade liberalization on countries and regions of the world that experience little geographical mobility (McCracken, 2014). Studies have established that little mobility slows down the rate at which markets open up to accommodate new goods and services (Feasel, 2018). However, there is no major reason for concern bearing in mind that globalization is still an ongoing process that has enormous potential to increase the trading activity and employment opportunities in any part of the world.

Globalization increases the interconnectedness among markets because of improved communication and heightened business acumen (Feasel, 2018). Investors are benefiting a lot from the improved communications technology because the ability to study a new market for potential risks and profit opportunities has been enhanced at a greater distance compared to several years ago. Due to globalization, investors have gained greater access to new markets across the world that offers more opportunities for investment (Goldberg, 2015).

According to economists, the ability of any economy to attract new investors gives a clear indication that more people are employed, thus economically empowered (Ritzer & Dean, 2015). This phenomenon is often necessitated by the fact that products and services that were previously available within a single market are able to find their way into international markets due to the improving relations between countries.

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Globalization has also led to increased competition in the global market. The increasing demand for high quality goods and services across the world had pushed companies to broaden their target areas (Williams, Bradley, Devadason & Erickson, 2014).

This has resulted in an increase in the number of multinational businesses that have chosen to expand their operations to foreign markets as a way of getting closer to the consumer. This has in turn resulted in an increase in the number of job opportunities, especially in countries where the production happens. Since the turn of the century, a number of production companies from Europe and the United States have moved their operations to developing countries across Africa and Asia where the cost of production is lower due to availability of cheap labor (Goldberg, 2015).

Through globalization, the number of multinational ventures has steadily increased because the process of transitioning from a local market to global markets has been made easier. Reports indicate that many countries across the world have experienced increased amount of direct foreign investment injected into their economy (Ritzer & Dean, 2015). This development is often influenced by the viability of a country’s labor force, which tends to attract more investors because they have confidence in the returns that will be made from any kind of investment.

Globalization has had the greatest impact on the rate of employments across the world. It has led to the growth of new economic sectors, expansion of the existing one, as well as influenced greater value for the entertainment and service industries (Moak, 2017). The increased demand for labor has also resulted in better wages, especially for people in managerial positions because they have a large workforce to handle and a more markets to maneuver.

Reports indicate that globalization has also increased the standards of employment with regard to the skills and competences that employees ought to have in order to meet the demands of the labor market (Thangavelu & Chongvilaivan, 2013). In the contemporary world, employers look for employees who are technology savvy and have the cultural competence to meet the diverse needs of all clients. The cultural competency element is greatly emphasized in the healthcare industry, where nurses and other healthcare practitioners offer services to a highly diverse population like in the United States.

Globalization has led to an increase in the demand for quality goods and services, thus increasing the pressure on employers to have a highly competent workforce (Feasel, 2018). It has also affected the labor market in a negative way in terms of the level of brain drain experienced in many parts of the world, especially in the developing countries. Globalization has liberalized the labor market, which has in turn resulted in many people moving to the developed world in search for well paying jobs and better working conditions (Baldwin, 2016). This has had a huge negative impact on employment because the demand for higher wages is also on the rise. This phenomenon is necessitated by the increasing cost of living, as people continue to seek goods and services of higher quality.


Studies have shown that globalization has different impacts on societies across the world due to factors such as cultural values, religious believes, language, level of education, income, and geographical location among others. Globalization has influenced trade and employment in a significant manner. One of the notable impacts is increased competition between businesses as they try to gain a competitive advantage in the global market.

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This has in turn resulted in creation of more job opportunities and better living standards due to the improved quality of goods and services. Globalization has also affected the cost of goods and services, increased uptake of technology, and opening up of new markets across the world. In addition, the advancement of global trade has played a pivotal role in improving international relations as very country seeks to open up its economy to as many foreign investors as possible.


Baldwin, R. (2016). The great convergence. Massachusetts, MA: Harvard University Press.

Ericksen, T.H. (2014). Globalization: The key concepts (2nd ed.). New York, NY: A&C Black.

Feasel, E.M. (2018). Exports, trade policy and economic growth in eras of globalization. New York, NY: Routledge.

Goldberg, P.K. (2015). Trade and inequality. New York, NY: Edward Elgar Publishing Limited.

Krist, W. (2013). Globalization and America’s trade agreements. New York, NY: Woodrow Wilson Center Press/ John Hopkins University Press.

McCracken, B. V. (2014). The beauty trade: Youth, gender, and fashion globalization. New York, NY: Oxford University Press.

Moak, K. (2017). Developed nations and the economic impact of globalization. New York, NY: Springer International Publishing.

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Ritzer, G., & Dean, P. (2015). Globalization: A basic text (2nd ed.). New York, NY: John Wiley & Sons.

Thangavelu, S., & Chongvilaivan, A. (2013). Globalization, outsourcing and labor development in ASEAN. New York, NY: Routledge.

Williams, S., Bradley, H., Devadason, R., & Erickson, M. (2014). Globalization and work. New York, NY: John Wiley & Sons.

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StudyCorgi. (2020) 'Globalization Impact on Trade and Employment'. 27 December.

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