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World History 2

<OpenstaxParagraph>
	While it is tempting to see globalization and the rise of <OpenstaxTerm>MNC</OpenstaxTerm>s as generally benefiting the people of developed countries, the reality is more complex. Improvements in transportation and MNCs’ use of labor resources in countries around the world have sometimes harmed workers in developed countries like the United States. Supporters of <OpenstaxTerm>NAFTA</OpenstaxTerm>, for example, argued that the <OpenstaxTerm>United States</OpenstaxTerm> would benefit from reduced trade barriers, lower prices for agricultural goods from <OpenstaxTerm>Mexico</OpenstaxTerm>, and newly available jobs for lower-wage workers. Opponents, however, recognized that the groups hardest hit by transformations in the labor market would be those least able to withstand the damage, mainly working-class manufacturing workers in the United States and <OpenstaxTerm>Canada</OpenstaxTerm>. Both sets of predictions proved accurate.
</OpenstaxParagraph>
<OpenstaxParagraph>
	After NAFTA was implemented in 1994, trade and development across the three participating countries surged. Trade across the U.S.-Mexico border surpassed $480 billion by 2015, an inflation-adjusted increase of 465 percent over the pre-NAFTA total. A similar, if smaller, increase occurred in U.S.-Canadian trade during the same time. In Mexico, per capita <OpenstaxTerm>GDP</OpenstaxTerm> grew by more than 24 percent, topping $9,500. Even more impressive growth occurred in Canada and the United States.
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<OpenstaxParagraph>
	But between 1993 and 2021, the United States lost nearly eighteen million manufacturing jobs when some companies found it more profitable to relocate to Mexico. Not all these job losses can be attributed to NAFTA, but many can, as manufacturing that otherwise would have taken place in the United States was moved to <OpenstaxTerm><OpenstaxEm>maquiladoras</OpenstaxEm></OpenstaxTerm>, factories in Mexico along the U.S. border that employ people for low wages. <OpenstaxEm>Maquiladoras</OpenstaxEm> often receive materials from U.S. manufacturers, transform them into finished products, and then ship them back to the United States for the manufacturers to use. After the passage of NAFTA, U.S. car manufacturers began to make use of parts produced inexpensively in Mexico that would have been much more expensive had they been produced in the United States. For example, in 2015, <OpenstaxTerm>Brake Parts Inc.</OpenstaxTerm> moved its operations from California to Nuevo Laredo, Mexico, and almost three hundred U.S. workers lost their jobs in the process. Workers in the automobile industry, once the backbone of the U.S. industrial sector, suffered as jobs and automotive plants were relocated to Mexico. Some economists, however, argue that the use of inexpensive parts produced in <OpenstaxEm>maquiladoras</OpenstaxEm> allowed the U.S. automobile industry to survive. Jobs in the clothing industry also declined 85 percent. There were simply fewer obvious advantages to keeping such jobs in the United States.
</OpenstaxParagraph>
<OpenstaxParagraph>
	Economists say the loss of manufacturing jobs was less a result of NAFTA than of other structural economic changes in the United States, such as automation. And while many U.S. workers lost their jobs as a result of NAFTA, millions of others found work in industries that produced goods for sale in Mexico. Nevertheless, the impression that NAFTA and <OpenstaxTerm>globalization</OpenstaxTerm> have brought poverty and misery to the working class in the United States remains strong and has influenced the nation’s politics since the 1990s. Responding to these beliefs, in 2017, President Donald <OpenstaxTerm>Trump</OpenstaxTerm> instigated a renegotiation of NAFTA, creating the <OpenstaxTerm>United States-Mexico-Canada Agreement</OpenstaxTerm> (<OpenstaxTerm>USMCA</OpenstaxTerm>). The USMCA included strong property rights protections, compelled Canada to open its dairy market more broadly, and required that workers in the automotive sector in all three countries be paid competitive wages. The agreement replaced NAFTA and went into effect in 2020.
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<OpenstaxParagraph>
	The complaints that arose during the NAFTA debates had been voiced for decades. Since the 1970s, many in the United States had argued that globalization allowed <OpenstaxTerm>Japan</OpenstaxTerm>, its enemy during World War II, to race ahead and outcompete domestic manufacturers. By the 1980s, Japan was exporting a huge volume of consumer electronics and automobiles into the U.S. market. Its economic resurgence created a massive trade deficit (the difference in value between what a country imports and what it exports) in the United States and rising concerns about its global competitiveness.
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<OpenstaxParagraph>
	Political figures like Walter <OpenstaxTerm>Mondale</OpenstaxTerm>, the 1984 Democratic Party nominee for president, called the trade deficit a threat to the United States and spoke in dire terms about an emerging global trade war. Many others drew connections between Japan’s economic rise and growing unemployment in the United States. Auto workers were especially vocal, declaring that Japan was using unfair practices and artificially limiting the number of American cars that could be sold in Japan (<a href="#fig-00006">Figure 15.8</a>). While the reality was more complicated, politicians were primed to respond with tough talk and reforms. In 1981, President <OpenstaxTerm>Reagan</OpenstaxTerm> pressured Japan to limit the number of cars it exported to the United States. The United States also made efforts to limit the importation of foreign steel and semiconductors for the same reasons.
</OpenstaxParagraph>
<OpenstaxFigure id="fig-00006" src="https://openstax.org/apps/archive/20240226.174525/resources/81ac49f374bdc6188a7c97d2e105238fdcebbbc3" alt="A picture of the side of a small hatchback, two-door, orange car is shown on white pavement. The car has black wheels with gray hubcaps, a black and silver back bumper, a rear-view mirror on the right side of the front hood, and red lights with silver grates on the back. The word “Honda” is across the back in silver lettering. A driver is sitting inside the right side of the car in front of the steering wheel with the window rolled down. Other orange and red cars are seen in the background as well as a man in a white shirt walking." mediaType="image/jpg" width="901" height="444" />
<OpenstaxFigureText width="901">
	<strong>Figure 15.8</strong> Small, fuel-efficient Japanese cars like this 1970s-era Honda Civic grew increasingly popular in the United States during the 1970s and 1980s, prompting American automotive workers to complain that Japanese car companies were using unfair trade practices. (credit: “Honda Civic RS rear” by “TTTNIS”/Wikimedia Commons, CC0 1.0)
</OpenstaxFigureText>
<OpenstaxParagraph>
	By the start of the 1990s, Japan’s economic engine was starting to cool, and so were American concerns about Japanese dominance. However, companies in the developed world faced challenges rooted in the high cost of living and resulting high wages they had to pay to their employees. Globalization offered a solution in the form of <OpenstaxTerm>outsourcing</OpenstaxTerm> and <OpenstaxTerm>offshoring</OpenstaxTerm>. Outsourcing occurs when a company hires an outside firm, sometimes abroad, to perform tasks it used to perform internally, like accounting, payroll, human resources, and data processing services. Offshoring occurs when a company continues to conduct its own operations but physically moves them overseas to access cheaper labor markets. Outsourcing and offshoring were hardly new in the 1990s. But with globalization, trade agreements like NAFTA, and the ability to ship goods around the world, they became a major cost-savings option for large companies. Trade agreements like NAFTA made it possible to build plants in Mexico and still sell the products they produced in the United States. Companies could also offshore some of their operations to countries in Asia where labor was much cheaper.
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<OpenstaxParagraph>
	Those hired overseas experienced their own problems, however, because outsourcing often led to the rise of <OpenstaxTerm>sweatshops</OpenstaxTerm>, factories where poorly paid workers labor in dangerous environments. Images of women and children in horrific working conditions in Central America, India, and Southeast Asia circulated around the developed world in the 1990s as examples of the consequences of outsourcing. Major MNCs like Nike, Gap, Forever 21, Walmart, Victoria’s Secret, and others have been harshly criticized for using sweatshops to produce their shoes and clothing lines. In 2013, the plight of sweatshop workers gained widespread attention when a building called <OpenstaxTerm>Rana Plaza</OpenstaxTerm>, a large complex of garment factories in <OpenstaxTerm>Bangladesh</OpenstaxTerm>, collapsed, killing 1,134 and injuring another 2,500 of the low-wage workers who made clothing for luxury brands like Gucci, Versace, and Moncler. The disaster led to a massive protest in Bangladesh demanding better wages and reforms. In the aftermath, studies and inspections of similar factories revealed that almost none had adequate safety infrastructure in place.
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<OpenstaxNote>
	<OpenstaxNoteTitle> The Past Meets the Present </OpenstaxNoteTitle> <OpenstaxH3> Sweatshops and Factory Safety: Then and Now </OpenstaxH3>
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		On March 25, 1911, a fire started at the <OpenstaxTerm>Triangle shirtwaist factory</OpenstaxTerm> in New York City that caused the deaths of 146 workers, most of them immigrant women and girls of Italian or Jewish heritage. It was soon discovered that the factory had poor safety features, and the doors were locked during the workday, making it impossible for the workers to flee.
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	<OpenstaxParagraph>
		News of the tragedy spread quickly in New York and around the country. Government corruption, which was widely reported, had allowed the factory to continue operating despite its poor conditions and safety deficiencies. In the end, the tragedy led to massive protests in New York. The city even set up a Factory Investigating Commission to prevent such events from happening again.
	</OpenstaxParagraph>
	<OpenstaxParagraph>
		Just over a century later in Bangladesh, a similar tragedy occurred. On April 24, 2013, the Rana Plaza building collapsed, killing 1,134 workers and injuring thousands of others. The owners of the garment factories housed in the building knew it had structural problems but still demanded that employees continue to work or lose their jobs.
	</OpenstaxParagraph>
	<OpenstaxParagraph>
		A massive public outcry in Bangladesh followed the building’s collapse. People were outraged by the disaster and by the fact that the workers made some of the lowest wages in the world sewing garments for major multinational companies. The public demanded that the families be compensated and those responsible be prosecuted, leading many of the garment companies to donate money to the families of those lost. The disaster also inspired a public movement to make the garment industry in Bangladesh more transparent.
	</OpenstaxParagraph>
	<OpenstaxUl>
		<OpenstaxLi>
			Why do you think it remains difficult to get garment factories like these to prioritize safety?
		</OpenstaxLi>
		<OpenstaxLi>
			Beyond the obvious, what are some of the similarities between the two tragedies?
		</OpenstaxLi>
	</OpenstaxUl>
</OpenstaxNote>
<OpenstaxNote>
	<OpenstaxNoteTitle> Link to Learning </OpenstaxNoteTitle> 
	<OpenstaxParagraph>
		To better understand the similarities between the Triangle shirtwaist factory fire and the Rana Plaza collapse, view photos of the <a href="https://openstax.org/l/77TriangleFire">Triangle shirtwaist factory fire</a> and read <a href="https://openstax.org/l/77FireSurvivor">interviews with survivors</a> of the fire. Then look at the photo essay covering the <a href="https://openstax.org/l/77RanaPlaza">Rana Plaza collapse</a> by award-winning photographer and activist Taslima Akhter.
	</OpenstaxParagraph>
</OpenstaxNote>
<OpenstaxParagraph>
	The multinational technology company <OpenstaxTerm>Apple</OpenstaxTerm> Inc. has faced intense criticism in recent years for its use of foreign-owned sweatshops in Asia. Since the early 2000s, reports of sprawling factories with hundreds of thousands of workers assembling iPhones have made the news and led to a public-relations nightmare for the company. Investigative journalists have revealed that workers suffer a pattern of harsh and humiliating punishments, fines, physical assaults, and withheld wages. In some instances, conditions in the factories have pushed assembly-line workers to commit suicide rather than continue. Apple has insisted it takes all such accusations seriously and has tried to end relationships with such assembly plants, but those familiar with the problems have complained that little progress has been made.
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	Even when <OpenstaxTerm>MNC</OpenstaxTerm>s commit to providing a safe working environment and fair wages abroad, the practice of <OpenstaxTerm>subcontracting</OpenstaxTerm> often makes this impossible to guarantee. Foreign companies to whom multinationals send work often distribute it among a number of smaller companies that may also subcontract it, in turn. It is sometimes difficult for MNCs to know exactly where their goods are actually produced and thus to enforce rules about wages and working conditions.
</OpenstaxParagraph>
<OpenstaxParagraph>
	Multinationals have harmed the countries in which they operate in other ways as well, including deforestation and the depletion of clean, drinkable water. They are also major producers of greenhouse gases and responsible for air pollution and the dumping of toxic waste. MNCs leave little in the way of profit in the countries they exploit, so funds are often lacking to repair or mitigate the damage they do.
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<OpenstaxParagraph>
	The desire for a better life and opportunities in the developed world has led many in the developing world to migrate. Millions of immigrants from Mexico and other parts of Latin America have made their way into the United States over the last few decades. They typically find low-paid labor harvesting crops, cleaning homes, and serving as caretakers for children. In these jobs, they serve an important role in the U.S. economy, often doing work domestic workers are unwilling to do. Many entered the country illegally and live and work in the shadows to avoid deportation. This makes them vulnerable to abuse, and they are sometimes preyed on by human traffickers and unscrupulous employers. The <OpenstaxTerm>United States</OpenstaxTerm> is not the only country where this dynamic occurs. <OpenstaxTerm>Saudi Arabia</OpenstaxTerm>, for example, depends heavily on foreign workers to fill jobs Saudi Arabian citizens are reluctant to take, such as caretaker or domestic servant. Some workers have reported physical and emotional abuse to international human rights watchdog organizations like <OpenstaxTerm>Human Rights Watch</OpenstaxTerm> and <OpenstaxTerm>Amnesty International</OpenstaxTerm>. Being immigrants, they often have little access to relief from the country’s justice system.
</OpenstaxParagraph>

15.1.4 Winners and Losers in a Globalizing World

1 Understanding the Past

1.1 Developing a Global Perspective

1.1.1 World History as Preparation for Life After College

1.1.2 World History and Global Citizenship

1.1.3 Features of This Textbook

1.2 Primary Sources

1.2.1 Learning to Evaluate Documents and Images

1.2.2 Documentary Sources: Competing Narratives

1.2.3 Textual Sources: The Importance of Language

1.2.4 Hidden in History

1.3 Causation and Interpretation in History

1.3.1 Levels of Causation

1.3.2 Interpretation in History

2 Exchange in East Asia and the Indian Ocean

2.1 India and International Connections

2.1.1 The Mughal Empire

2.1.2 The Sultanate of Gujarat

2.1.3 The Rise of the Maratha Empire

2.1.4 European Colonialism

2.2 The Malacca Sultanate

2.2.1 The Rise of the Malacca Sultanate

2.2.2 European Malacca

2.3 Exchange in East Asia

2.3.1 Japan

2.3.2 China’s Dynastic Exchanges

2.3.3 Korea and Its Neighbors

3 Early Modern Africa and the Wider World

3.1 The Roots of African Trade

3.1.1 Saharan Trade Routes

3.1.2 The Spread of Islam

3.1.3 The Mali Empire

3.2 The Songhai Empire

3.2.1 The Rise of Imperial Songhai

3.2.2 The Reign of Askia the Great

3.2.3 The Decline of Songhai

3.3 The Swahili Coast

3.3.1 The Rise of the Swahili City-States

3.3.2 Slavery on the Swahili Coast

3.3.3 The Contest for the Swahili Coast

3.4 The Trans-Saharan Slave Trade

3.4.1 The Role of Kanem-Bornu

3.4.2 The Arrival of Europeans

3.4.3 The Later Trans-Saharan Slave Trade

4 The Islamic World

4.1 A Connected Islamic World

4.1.1 Politics and Religion in the Ummah

4.1.2 Islamic Trade Networks

4.1.3 Technology in the Islamic World

4.2 The Ottoman Empire

4.2.1 Culture and Society

4.2.2 Expansion, Revolutions, and Reform

4.2.3 Science and Technology

4.3 The Safavid Empire

4.3.1 The Rise of the Safavid Empire

4.3.2 Establishing Shi‘ism as the State Religion

4.3.3 Safavid Government and Culture

5 Foundations of the Atlantic World

5.1 The Protestant Reformation

5.1.1 The Origins of the Protestant Reformation

5.1.2 Calvinists, Anabaptists, and Anglicans

5.1.3 The Catholic Reformation and the Wars of Religion

5.2 Crossing the Atlantic

5.2.1 The Rise of Maritime Nations

5.2.2 The Columbian Exchange

5.3 The Mercantilist Economy

5.3.1 The Rise of Mercantilism

5.3.2 Mercantilism and the Expansion of Empire

5.3.3 Mercantilism and Its Critics

5.4 The Atlantic Slave Trade

5.4.1 Slavery and the Triangular Trade

5.4.2 African and North American Slavery

5.4.3 The Economics of Slavery

6 Colonization and Economic Expansion

6.1 European Colonization in the Americas

6.1.1 Spain’s Encomienda System

6.1.2 English Settlements in North America

6.1.3 French and Dutch Settlements

6.2 The Rise of a Global Economy

6.2.1 The Seven Years’ War

6.2.2 British Influence in India

6.2.3 China’s Dominance in Trade

6.2.4 Colonial Resistance and Revolution

6.3 Capitalism and the First Industrial Revolution

6.3.1 From Mercantilism to Capitalism

6.3.2 Mechanization

6.3.3 Marxism

7 Revolutions in Europe and North America

7.1 The Enlightenment

7.1.1 The Authority of Reason

7.1.2 Natural Rights

7.1.3 Social Contract Theory

7.2 The Exchange of Ideas in the Public Sphere

7.2.1 Public Debate and Dissent

7.2.2 The Republic of Letters

7.2.3 Academies, Universities, and Intellectuals

7.3 Revolutions: America, France, and Haiti

7.3.1 The American Revolution

7.3.2 The French Revolution

7.3.3 The Haitian Revolution

Question	Answer
the process of moving some of a company’s operations overseas to access cheaper labor markets	offshoring
the process of hiring outside contractors, sometimes abroad, to perform tasks a company once performed internally	outsourcing