1. Global Economy
GOVT 2305, Module 1

2. Global Economy
The integration of national economies into a world economic system in which companies compete worldwide for suppliers and markets.

3. Fall of USSR
The collapse of the Soviet Union in 1991 led to the opening of the old countries of the USSR and China to international trade.

4. Globalization Helps . . .
Computers, agriculture, financial services, airplane manufacture, weapons, oil drilling equipment, healthcare, education, etc.

5. Globalization hurts…
Automobile manufacture, textiles, leather goods, steel—labor intensive manufacturing and assembly in general

6. Wage Rate Competition, 2011

7. U.S. Manufacturing Jobs
Nearly 8 million U.S. manufacturing jobs have been lost since the late 1970s with most losses coming since 2001.

8. What is outsourcing? Why do companies outsource?
Explain the cartoon.
Outsourcing means turning to an outside supplier for goods and services. Some U.S. medical providers, for example, have x-rays read in India.
What is outsourcing? Why do companies outsource?

9. Outsourcing Pay Differential

10. Destinations

11. Companies Downsize to Compete
What is downsizing? Why do companies downsize?
Companies are getting by with fewer full-time employees by using part-time workers and temporary employees.

13. Example of Downsizing

14. Construction Jobs

15. Good jobs for skilled workers

16. And for low skill workers . . .

17. Jobs and Salaries

19. What We Have Learned
What is the global economy? What major event led to globalization?
What is outsourcing? Why do companies outsource?
What is downsizing? Why do companies downsize?
How has globalization affected low skill workers? How has it affected high skill workers?