Does Globalization Help or Hurt the State of Alabama - Essay Example

? Does Globalization help or hurt the of Alabama? Argumentative essay Introduction Globalization of the economy refers to unification of economies of the nations in the world. It can be achieved through elimination of trade barriers set by the government to protect their local economy. Globalization aims at ensuring that there is free trade between the nations. Globalization aims at increasing the goods and services available in the economy. It opens up labor markets and competition among the producers in the nation ensuring that quality commodities and opportunities are available in the economy. Globalization effects are dependent on the state of development of the nation. Countries that are termed as developing may not benefit from globalization compared to developed nations. This can be attributed to the lack adequate fund to acquire technology to compete with developed nations. Globalization can thus be evaluated with regards to the effect it may have on the nation it affects. The state of Alabama will be positively affected by globalization (Mishkin 2009: 187-196). Alabama’s economy depends on various industries to ensure that there is economic growth in the state. Alabama generates its revenue from agriculture with leading products being livestock products. The state’s agricultural produce includes broilers, cattle, eggs, cotton, horticulture and calves. Crop farming comprises 18% of revenue generated from agriculture. The State has manufacturing industries that add value to the raw material imported or from the country. Manufacturing industries in the State increase the revenue generated as the products from the manufacturing industries retail at a higher price compared to the raw material exports. Fishing along the golf of Mexico provides the State with revenue. Mining provides the state with most of the State's revenue with some of the minerals mined include coal, natural gasses and limestone. Mining in the State provides the local people with employment which improves their lifestyle. The service industry also contributes significantly to the State’s economy. The services provided in the state include community based, business government, and personal services (Cunat, 2009:179-212). Effects of trade The revenue generated from taxes levied on imports and exports from local and international businesses enable the government to run its operations. Globalization of economies requires that such trade barriers be eliminated to facilitate the free movement of commodities. The government can generate additional revenue from the business with globalization. Globalization encourages international investors. International investors increase the employment opportunities through the industries they venture into in the State. Imports will increase through globalization. Increased imports enable the citizens of the State to choose from a wide range of products provided in the market. The free trade also facilitates exports such that the industries in Alabama can market their products in all markets they may find profitable. The trade in processed good from the industries in the state ensures that it enjoys favorable terms of trade. Unlike other nations especially the developing nation which star in sale of raw material, Alabama’s finished products may retail at a higher cost thus improving the States terms of trade. Improved trade between other States would ensure that the nation reduces its budget deficits. Budget deficits are as a result of increased government spending compared to the revenue it generates. Increased trade between other States enables the government to collect more revenue from the workers and the industries in the nation thus more revenue generated. Government spending in improvement of infrastructure and provision of some basic amenities can also be reduced by encouraging foreign investments (Andres 2011:885-901). Competition may be viewed as a local industry destroyer with many weak industries falling under the pressure of competition. Competition enables the stronger industries to adopt quality driven processes improving the quality of goods provided to the local market. Competition enables the products from Alabama to compete adequately with the foreign nations in the local and international markets. Direct Investments Direct investments relate to the State's investment in the country and the international market. Investments are done through the acquisition of more than ten percent of the company’s shares. Foreign direct investment may be positive or negative as a result of comparing the inward and outward foreign investment. With globalization, the State of Alabama will be able to increase its investments in the foreign market. Globalization does not limit the ownership of organizations to a nation thus opening up the stock market. Increased investments in a foreign nation would increase the State’s income and cause an increase in outward foreign investment (Cunat, 2009:179-212). Globalization puts the State at risk of increased inflow of foreign investments. Competitive shareholding may result to an increase in the share prices in the State. Movement of shares in the market would result to an improved economic environment. Investments in other nations can be achieved through setting up industries in export processing zones or acquiring tax holidays from governments in the international market. Direct investment inflow will inject into Alabama’s economy capital and skilled manpower (Hickman, 2011:654-672). Investors into the State will need to use local labor and capital to sustain their industries; there will also be technological transfer between the trading nation thus even developments in the globe. Alabama will be able to keep up with transformations in technology. Technological and skill transfer enable the State to compete adequately in the market due to production of quality products. Technological transfer enables companies to reduce their production cost thus the quality goods will retail at a lower cost (Kwon, 2010:251-281). Immigration on the state of Alabama Immigration means the migration of people to areas with high productivity. Globalization favors immigration with people moving into the State and others migrating to other states or nations to apply their skills. Migration into Alabama would increase the competition for employment in the already congested employment sector. The industries may benefit from cheap labor from immigrants from other nations. This would reduce the production cost of the goods produced. Cheap goods would compete adequately in the local and international market. Citizens of Alabama can also migrate to other nations offering better pay for their skills; increase earnings would translate into higher taxes for the government thus economic improvement for the state (Egger, 2010: 987-1005). Immigration of qualified personnel would facilitate skill transfer in the globe. In the service industry, skilled personnel from other nations may offer quality services and these skills can be learnt by the local staff in the industry. The learnt skills can be utilized to increase the competitive advantage in the local service industry. Immigration may cause interference in the State's culture. Cultural diversity can be useful to the state in that understanding different cultures enables people to understand each other thus stronger relationships between nations (Naghshpour, 2009: 1-27). Globalization may have its negative effect on the state of Alabama but the benefits out weigh the demerits. Globalization would be suitable for the State on economic and cultural basis. Globalization would improve relations with other nations thus increase trade. Increased trade with no restrictions enables the nations to grow economically. The competition from other foreign nations may cause the need to improve conventional methods of production and proceeding which would improve the quality of the products produced. Alabama’s economy will improve with the full adaptation of globalization. Works cited Cunat, V, & Guadalupe, M 2009, 'Globalization and the Provision of Incentives inside the Firm: The Effect of Foreign Competition', Journal Of Labor Economics, 27, 2, pp. 179-212. http://ehis.ebscohost.com/eds/pdfviewer/pdfviewer?sid=09d69a39-85d2-480d-8c4d-251a0a48a375%40sessionmgr112&vid=3&hid=102 Egger, H, & Kreickemeier, U 2010, 'Worker-Specific Effects of Globalization', World Economy, 33, 8, pp. 987-1005. http://ehis.ebscohost.com/eds/pdfviewer/pdfviewer?sid=ab093593-e305-4ed2-9c58-e8de64b539cc%40sessionmgr12&vid=2&hid=20 Hickman, D, & Olney, W 2011, 'GLOBALIZATION AND INVESTMENT IN HUMAN CAPITAL', Industrial & Labor Relations Review, 64, 4, pp. 654-672. http://ehis.ebscohost.com/eds/pdfviewer/pdfviewer?sid=0b220ca0-5009-4dc2-af49-ccbcd6bc0258%40sessionmgr4&vid=3&hid=20 Andres Villarreal, & Arthur, S 2011, 'Bringing the firms into globalization research: The effects of foreign investment and exports on wages in Mexican manufacturing firms', Social Science Research, 40, pp. 885-901. http://ehis.ebscohost.com/eds/detail?sid=706e5b9f-9c1f-4fbb-8772-6e1b579a2d19@sessionmgr15&vid=1&hid=http://ehis.ebscohost.com/&#db=edselp&AN=S0049089X10002905 Kwon, H, & Pontusson, J 2010, 'Globalization, Labour Power and Partisan Politics Revisited', Socio-Economic Review, 8, 2, pp. 251-281. http://ehis.ebscohost.com/eds/pdfviewer/pdfviewer?sid=bceccde6-c6b9-4dcb-8875-13c93d9aab5b%40sessionmgr104&vid=2&hid=120 Mishkin, FS 2009, 'Globalization, Macroeconomic Performance, and Monetary Policy', Journal Of Money, Credit, And Banking, 41, pp. 187-196. http://ehis.ebscohost.com/eds/pdfviewer/pdfviewer?sid=d59dbcca-613c-49eb-a43f-9d368a9edeaf%40sessionmgr113&vid=2&hid=120 Naghshpour, S, & St. Marie, J 2009, 'Globalization Discontent: The Effects of Globalization on Ethnic Protest', Peace Economics, Peace Science, & Public Policy, 14, 3, pp. 1-27 http://ehis.ebscohost.com/eds/pdfviewer/pdfviewer?sid=e654fd86-2891-49cc-a536-588ab986f68d%40sessionmgr112&vid=2&hid=120 Read More