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Globalization in the United Kingdom
Globalization refers to the integration of various national economies that is through trade, capital flow, investment, technology, migration, and labor. It typically involves elimination of international barriers which encourages the flow of services, goods, work and capital. The removal of quotas and tariffs which have been restricting the open and free trade among nations has been helpful in globalizing the entire world’s economy, communication and transportation technologies have had the most significant effect on accelerating the process of globalization. The process involves an increased interdependence and integration of the worldwide economy. That means there would be an increased movement of capital and labor. The literature below provides insight on the several effects that globalization has had on the United Kingdom and assessing the level at which it has suffered and benefited from the same and analyzes whether the nation would be at a better position within or outside the European Union (EU).
Impact on the Economy of United Kingdom
One of the benefits that globalization has had in the country is the increased trade. Increased trade and globalization reflect that the United Kingdom firms would find it beneficial for their product specialization as they would have a competitive advantage. For instance, the United Kingdom has a comparative advantage in the goods like components of the nuclear power, financial services and video gaming (Hanley & Rowntree, 2016). The comparative advantage is likely to enable increased exports that create more jobs.
The country also has better or more excellent import choices. The reason for this is that Britain has increased the selection of the consumer goods. For example, the people within the country are accustomed to the annual fruit availability as well as vegetables attributed to the imports of food. Globalization has also resulted in lower prices and increased competition in the United Kingdom (Hanley & Rowntree, 2016). It entails the domestic monopolies facing increased competition internationally. That has led to lower prices for goods and services for the customers, and it is noticeable specifically in industries like electronics, food, and clothing where the country can be regarded as a net importer (Hanley & Rowntree, 2016).
The process of globalization has also resulted in lower costs for the firms. It makes a more natural method to outsource the parts within the production process such as in web development and call centers to countries which have lower labor costs. Firms may use technology to interact with individuals around the globe. That helps in reducing the prices and costs. However, outsourcing may cause domestic losses of jobs and also lower service quality.
Globalization also helps in migration process as migrants can easily enter and also work in the United Kingdom. The free labor movement may assist Britain in filling the available job vacancies. That is essential especially in industries like the NHIS and fruit picking where the companies usually find some shortages in labor. On the other hand, mass migration may place increased stress on the public services and housing in the United Kingdom due to the net migration of individuals into Britain (Hanley & Rowntree, 2016). There are concerns over migration levels which have led to a vote that is against globalization known as Brexit.
Globalization leads to global economic cycle which significantly affects the U.K. For instance, if there is a deep recession in the EU/US, Britain will be concerned since they rely on European Union in exporting numerous goods. The credit crunch that was global may have had some significantly damaging effects on the economy of the United Kingdom as they were affected by financial crisis within other countries. However, global growth has some positive impact on the economy of the United Kingdom.
Structural unemployment or shifting sectors may also be as a result of Globalization. For instance, the United Kingdom does not have a comparative advantage in numerous manufacturing industries whereas the developing countries do attribute to lower levels of labor costs (Hanley & Rowntree, 2016). The process may lead towards temporary structural unemployment as the unemployed individuals struggle to obtain jobs in other new industries. A significant issue in the United Kingdom is that many laborers may feel like they are left behind by the globalization process. They feel like globalization may enable companies to make increased profits, but the employees have to struggle to find new jobs that match their previous ones regarding loyalty, pay, and security (Hanley & Rowntree, 2016).
Tax avoidance has also been brought about by globalization in the United Kingdom. It has enabled companies to shift their production from the high tax economies to the countries charging lower tax. That is often merely taking advantage of the loopholes in tax. For example firms such as Amazon, Google and Apple have been taking advantage of the lower tax rates in nations like Ireland, Bermuda, and Luxembourg (Hanley & Rowntree, 2016). That means that the United Kingdom treasury is making losses out on the tax revenues. Multinationals have significant cash reserves which indicate that globalization may have caused unequal benefits’ distribution (Hanley & Rowntree, 2016).
There is also a growing inequality in recent decades have seen some ever increasing levels of the top 1% earners gaining more income. Regarding the environment, the growing global economy and globalization have had implications for the world environmental state as well as the United Kingdom. Global warming will likely affect they the United Kingdom.
Winning and Losing Parties in the U.K.
There are some growing concerns in recent decades which may not always lead to improvement. Some benefit but more may be left behind. Several winning parties have benefited from globalization including the companies with a comparative advantage such as the high-tech firms, the high-income earners, and workers operating in the export industry. Also, the wealthy people that can invest overseas and benefit from the low taxation rates and the consumers that are benefiting from the lower prices (Hanley & Rowntree, 2016).
Losing parties include the unskilled manual laborers that have witnessed the decreased levels of job opportunities with structural alteration of the economy, the average taxpayer that lose out on the schemes of tax avoidance and also the environment that is experiencing loss of their natural resources and global warming (Hanley & Rowntree, 2016).
Impact on Labor Mobility
The labor market of the United Kingdom has significantly changed in the last three decades partly attributed to globalization (BERR, 2008). There are some relevant trends which including increase in numbers of employees earning low wages within economies, including the United Kingdom. Also, the enrollment in the universities has doubled in number globally. That has caused an increase in the worldwide availability of educated and competent staff (Brown et al., 2010). International and worldwide enterprises currently can manage their workers globally, and the effect may be reflected on the ongoing British controversy regarding the migration for the skilled laborers whose origin are within the EEA nations where there were exceptions towards the cap that were introduced to enable the organization to employ their international employees.
The worldwide exchange rates all impact the UK economic health, affecting the levels of exports of services and goods in addition to the internal competitiveness with some repercussions for the employment in the country. They have also affected the migration into the UK as well as the relative wage levels attractiveness. The global crisis regarding finances that started in the year 2007 has significantly affected the job security in Britain which increases the rates of unemployment. The ongoing structural imbalances are threatening the stability (economic), and they were a part of discussion carried out within a G20 conference held at Seoul for the leading world economies in 2010 November (Hanley & Rowntree, 2016). All those trends contribute towards the interdependence of the UK with the global economy thereby affecting the people’s job prospects within Britain.
That globalization stage may follow a particular time for deindustrialization within Britain where it is traced back to an earlier stage when there were industries relocated towards different places that had numerous laborers earning a low-wage. The MacKinnon reports were both pointing towards a study that shows the manner in which unemployment issues, the inactivity of the labor market as well as the trend in low pay can be concentrated spatially. It is also linked towards the deindustrialization and contribute to the establishment of patterns that are highly differentiated regarding job opportunities across the nation (MacKinnon et al. 2011).
The trends have some significant impacts on the whole economy and also the experience of the people of community and work. Drawing on Esping-Andersen’s work (2007), the author argues that there is evidence which demonstrates a “hollowing out” of the labor market which affects the potential social morbidity and career paths. Such kind of developments have also led to the debates concerning the education system that is most appropriate for the UK and also its relationship with regards to the economic growth, inequality, poverty and social mobility (Esping-Andersen, 2005).
Mobility of Labor
A significant aspect of globalization is the increased mobility. The workforce in Britain is a part of that process with research which estimate more than 5.6 million UK people that are living overseas with more than half of them migrating for employment purposes (Finch et al. 2010.
The process of in-migration at the same time towards the United Kingdom is one of the best ways in which people can have contact directly with the global operations. Migration into Britain increased significantly for three years after the 2004 EU expansion (IPPR, 2010).
MacKinnon et al. (2011) provide insight on the manner in which trends in the increasing inmigration have been taking place along the increase in the use of agency work and contracting out of the employers. They author looks into some relevant research which reported about 62% and more vacancies of the Jobcentre which were accounted for by the activities of the unemployment agencies. That was at a period when the migrant workers tended making up some disproportionate numbers of the workforce of the agency that was estimated at 25% by the researcher (IPPR, 2010).
MacKinnon et al. (2010) were concerned across the case study they were carrying out concerning migrant labor that was considered a threat to the local occupations and people were infuriated by the employers using immigrant work at the power wage level. In the case, participants recognized there was a particular desire that employers had for some flexibility and cost effectiveness and also increased the social as well as economic costs for the measures that have diminishing likelihood for the workers learn and gain some experience, their job position insecurity which negatively affects them at community level. The researchers argued that there is a portion of the workers in the UK firms that have to be on permanent terms but not contracts on a short term basis and the companies are causing social and economic insecurity for households, people and communities (MacKinnon et al, 2010).
The British government can influence the manner in which market globalization affects the work nature in Britain through different social and economic regulation, alongside its role within the international arenas whereby the global economic governance is developed and debated (Hanley & Rowntree, 2016). In Britain, the regulation of the workers in the agencies is essential, provided the level of inequality.
Volatility within the Job Market
The crisis regarding finances in the United Kingdom was said to have highlighted the rate at which the alterations at a global level may have impacted the employment within the state. Unemployment increased from 1.5 million to 2.5 million in 2007 and 2009 respectively (Hossain et al., 2011). The overall rate of employment was affected initially for men than women, but the public sector cuts of the UK are currently widely forecast to have more adverse effects on the employment of women and poverty than for the men (Hossain et al., 2011).
Hossain (2011) mentions that the researchers stated that the international integration might represent a particular integration of various opportunities with risks as well. Businesses that are more globalized are more exposed towards the direct impact of the financial crises, and they can recover and cope with the conditions brought about by globalization. The global influence was stipulated to have affected Northern Ireland and Sussex employees regarding an increase in commodity prices, volatility in the exchange rate as well as the decreased demand internationally. Most of the enterprises had to adapt in one way or another to the conditions that were more austere while some closed. With most people losing their jobs, some who retained their jobs would walk for miles to their workplace. More people were commuting in the region, and some had to travel across the Atlantic because of the cheap airfares options closing down (Hossain et al. 2011). Moreover, statistics did not portray the hardship which most individuals were experiencing to preserve a particular income level (Hossain et al. 2011). The job losses attributed to globalization have seen some changes in the working patterns among the employees in the UK. People were experiencing some uncertain income levels or reductions that were sudden, and they would find it so hard to cope with the situation. Hossain (2011) contends that the issues suggest a welfare system is needed to ensure that people can deal with their low earnings.
Effects on the Worldwide Connections
According to MacKinnon (2011), industrial problems in Britain due to globalization achieved some success briefly in influencing the local employment practice, and it was partly attributed to the mobilizing act which would have a worldwide impact. The study of MacKinnon established that the employees may have possessed some short-term impacts by reporting the threat to the UK energy supply to take action on their refineries which would result to the government pressuring the employers to settle, but the effect could not affect the alterations in the long term. That was attributed to the trends in the continuation of high contract level. The research team made a recommendation that involved strengthening the various links that were between the negatively affected local areas attributed to the global processes among the countries to improve the power of the workers in such kind of negotiations (MacKinnon et al. 2011).
Government Options
States may vary in the manner in which they respond towards developments within the economy. MacKinnon (2011) refers to several approaches employed in various economies which differ with their methods towards the employing regulations as well as levels of employment and support like social protection and retraining. The method used by the UK features some low levels of employment regulation. Another government option provided involves the security of employment by the government and also minimizing the employment regulations with a strong commitment towards retraining and high social protection levels. All these methods have been employed due to the process of globalization in the United Kingdom (MacKinnon et al. 2011).
Cost of Living
Globalization in the United Kingdom has affected the cost of living especially for low-income families. The minimum income standard in the UK measures the amount of money that different households need to reach a particular minimum standard that is acceptable. That is mainly based on the various item lists which the homes need to purchase, and they are classified into multiple types of services or goods and a cash value is assigned to each. The lists get drawn from the discussions with the public in relation to whatever has to be included to reach a minimum that is acceptable (Davies et al, 2010).
Items like food, clothes and fuel are the main areas which the evaluation identifies attributed to the significance of the low-income customers. Also, the home budgets are compared in line with their relation to the global aspects along the price patterns deviation from the CPI (Consumer Price Index) (Hirsch et al. 2011). Globalization significantly influences the living standards among families in Britain.
Importance on Food Prices in the UK
Globalization significantly influences the food prices in the United Kingdom regarding several aspects. One of them is the ability of food towards meeting the increasing global needs whereby crop yields and rates globally are slowing down. There are some competing pressures in the United Kingdom with regards to land utilization such as the need for biofuels. Multinational organizations are also involved in terms of specialized production of food that is by the geographical areas. There is also increased speculation on the gain as well as other items of food within the commodity markets (Hirsch et al. 2011). There are high costs of energy that is fluctuating and consequently affecting the distribution costs as well as the production of food. The exchange rates change the buying power of the United Kingdom.
According to the projections provided by Hirsch et al. (2011), the food prices are likely to persist on volatility and are expected to maintain at the elevated levels. The analysis done by Hirsch et al. (2011) on the food prices as well as the market practice has led them to speculate that the pressures are predicted to cause to the rise in the food prices and that may cause higher rates in retail food in the United Kingdom. However, the timing and magnitude are unpredictable.
Policing Making and Effects for Looking Into Inequality and Poverty
There may be an expansion in terms of the scope of the worldwide governance in the previous decades. UK policy, as well as practice influenced by globalization, may have significant effects on poverty. McGrew (2010) maintains that the country has more than 600 multilateral agencies, 7,000 informal summits, and clubs as well as 50,000 NGOs which are considering various areas from peacekeeping, child poverty, trade as well standards of communications to the risk-based capital requirements by the bank.
The global governance has provided numerous opportunities in support the reducing poverty in Britain. McGrew (2010) mentions that most of the roles would involve surveillance where global institutions monitor the UK government performance and progress. For example, development interested in promoting the wellbeing of children in under the scrutiny of UNICEF, the WHO looks into gender inequalities, social mobility as well as education attainment is monitored by the OECD (Hanley & Rowntree, 2016). There are numerous benefits brought about by the campaigns within the links that are close to the civil society movement which is focusing on poverty and developmental issues globally.
The global human rights operations provide different means for various organizations to advocate for a change in the policies for the elimination of poverty. Hanley & Rowntree (2016) contend that the research on poverty by JRF as well as human rights has identified several examples and opportunities like the ones of civil society associations towards submitting reports in the human rights committees of the UN which contest and supplement on the measures which the United Kingdom law is preparing.
UK Communities and Global Connections
Globalization was developed to consider the manner in which local regions would be able to make the most of the existing world diversity while at the same time having the capacity to respond efficiently towards the tension that it may cause. The JRF program identified globalization as the process of adding a complexity into the society through different trends towards Britain, such as settlements and migration (Hanley & Rowntree, 2016).
New Communication Technology and Globalized Media
News that is coming from different parts of the world reaches the United Kingdom faster today than in the previous decades. With the story rolling for 24 hours every day, and the other alternative forms from the other sources which are available online in addition to over the satellite, information is spread at a faster rate. While there has been an increased level of access to most information sources if the individuals can seek them out, there is decreasing amount which is provided proactively through the mainstream media. The regulation in the United Kingdom has been implemented to support the production of the news which is a public broadcasting settlement. As a result of globalization, the United Kingdom has put several support systems for worldwide news production as a significant part of the broadcasting.
There are new means of communications which reflects that the individuals can access the news through various sites of social networking as colleagues and friends can suggest online stories that are of interest to them. Globalization and new developments in technology within the media sector have as well enabled the customization of different content that is being provided to a client. That may increase the knowledge of some individuals with regards to the global affairs if they are seeking information actively and are using the full outlet range.
Influence of Globalization on the UK External Events
Research by JRF traced a complex social economic, military and political links with Britain. The analysis provided different ways in which people and groups may work as one in a society in various geographical distances. JRF research determined that societies within UK are affected rapidly by different international events and the information spread between economies through the internet, and other means. The effect would be the flow of individuals into the country thereby contributing towards an increased diversity of the population in the UK (Hanley & Rowntree, 2016).
Another response had identified some groups which conflict within their homes finding ways to create good relationships. Globalization has encouraged membership that does not consider ethnonationality but relies on a commonly shared feature including that of language.
Will Britain be in a Better Position if they are not Members of the European Union?
Britain was known to have joined the European Union in the year 1973. During the 1960s, Italy, France, and West Germany were producing more regarding per individual than the United Kingdom, and there was an increase in the gap each year. After the country joined the EEC, it started to catch up slowly with the other economies. The GDP per individual has been growing much faster than Germany, France, and Italy in over four decades ever since. By the year 2013, the United Kingdom was successful compared to three large countries’ average for once (Giles, 2017).
In the next 40 years, the country would outperform the other nations by about 23% (Giles, 2017). According to those findings, the performance of Britain surpassed the majority of 1,000 different country combinations that had a record which as resembled its own. The studies highlighted two central periods when the country’s prosperity increased which was after Britain joined, that was after the EU opened the single market in 1992 (Giles, 2017). Therefore, the becoming a member of the European Union had a growth effect on the United Kingdom.
Joining the EU also boosted trade in the UK. According to Giles (2017), the deal with the partners of the European Union helped the country grow faster than it did with other remaining nations which were members of the Trade Association that Britain previously was a member. Giles also stipulates; a University professor known as Nick Crafts mentioned that joining the EU allowed Britain to bounce back after it had initially fallen behind the neighboring countries. The trade liberalization was a significant factor which improved competition, and it removed the weak firms which made the management improved and better (Giles, 2017). Being a member of EU boosted trade in Britain hence the country would not likely have prospered if it were not a member of the European Union.
In closing, globalization involves removing unnecessary barriers to trade and communications between various countries and encourages the flow of goods, services, labor and capital among them. The above paper has delved into the multiple ways in which globalization has affected the United Kingdom regarding the economy, labor mobility, global connections, volatile job markets, cost of living, government options, and food prices. It has also discussed the benefits of the UK joining the EU and the reasons why it would not be in a better position if it were not a member.
Reference
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Brown, P. et al. (2010), Skills are not enough: The globalization of knowledge and the future of the UK economy. London: UKCES
Davies, A. et al. (2010) A minimum income standard for the UK in 2010. York: Joseph Rowntree Foundation.
Donald, A. and Mottershaw, E. (2009) Poverty, inequality and human rights. York: Joseph Rowntree Foundation
Esping-Andersen, G. (2005) ‘Rethinking the welfare state’ in N. Pearce and J. Margo, Politics for a new generation: The progressive moment. London: Palgrave Macmillan
Finch, T. et al. (2010) Global Brit: Making the most of the British diaspora. London: IPPR
Giles, C. (2017, March 31). What has the EU done for the UK? Retrieved March 28, 2018, from https://www.ft.com/content/202a60c0-cfd8-11e5-831d-09f7778e7377
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