Morey 1

Austin Morey

Professor Lori Bedell

CAS 137H

6 November 2017

The Impact of Globalization on the Modern Career

In the current age, new jobs and careers are created almost as quickly as people are

trained for them. The interconnectedness of global markets and nations make today’s workplace

ever changing and shifting. In the United States, a country with a civilian labor force greater than

the population of Russia, millions of workers are preparing to enter a work environment nothing

like the previous generation’s (“Civilian Labor Force”). Industries such as educational services

and health care have doubled in employment since 1990 and many new industries have been

created in recent years as well (“American Work Life”). For individuals, this means unparalleled

opportunity but a significantly rockier and less established path to a career. By virtue of the rise

of globalization and international competition, modern society no longer views a career as a

single job but rather any combination of careers with more job mobility, individual responsibility

and personal choice.

When national businesses entering a global economy started to need to compete with

international companies, it was no longer unheard of for companies to lay off workers in favor of

younger, cheaper labor. In the late 20th and early 21st century, the outsourcing of jobs has grown

exponentially because it is simply the most beneficial option for the companies. Countless firms,

most commonly financial institutions and tech companies, have shipped jobs overseas to cut

costs and become more competitive (Derks). An estimated $6 billion was saved by banks,

financial services and insurance companies by outsourcing just from 2000-2004. In a Deloitte
 Morey 2

Research poll completed in that last year, the average number of offshore jobs in 43 financial

institutions increased from 300 to 1,500 per company (Derks). With such a massive workforce in

international countries, outsourced jobs cost a fraction of what American workers are paid. The

average programmer in India earns nearly one tenth of the average American programmer. A

company paying a telephone operator in the United States an average hourly wage of $12.50

could pay someone overseas less than a dollar to do the same work ("Exporting Jobs"). This is

especially detrimental to unionized workers, whose primary bargaining power is their ability to

operate as a collective of many citizens with a stronger combined influence. Workers have to

market themselves well to their employers, especially if they will compete with cheap labor

overseas (McCutcheon). The public is well aware of this situation, too. A recent poll showed that

80 percent of Americans believe that outsourcing of jobs to other countries is harmful to U.S.

workers, making it the greatest threat to American jobs in the public eye (“The State of

American Jobs”). Companies have no legal obligation to report the number of jobs that they have

outsourced, but some reports blame offshoring for as many as 300,000 of the 2.4 million jobs

lost from 2001-2004. Regardless, offshoring is growing at a rate as large as 30-40 percent per

year and shows no signs of stopping ("Exporting Jobs"). Apart from cheap labor for employers,

outsourcing is beneficial as a way to provide better service, such as 24 hour call centers and

increased productivity. It also provides a way for companies to spread their capital investments

overseas and provide more stability for future revenue (Derks). Countless U.S. companies are

following the globalization movement by way of job outsourcing. These firms are following their

best incentives while changing the way the job market looks for American workers.

Watching companies abandon their workers for cheaper, foreign workers is only one

reason for the current disenchantment between the employer and the employee. Regardless of
 Morey 3

economic surges and downturns, CEOs of major corporations earn millions of dollars each year,

often primarily in stock options. In 2003, the average American worker received between a 3 and

4 percent pay increase, while their CEO counterparts in the 500 largest public companies

enjoyed pay raises of 22 percent. That year, the CEOs of Apple Computer, Oracle, Yahoo, and

Colgate-Palmolive each received wage increases of over 1,000 percent (Baran). When a 2011

bill was passed that required companies to report a ratio of the salaries between the CEO and the

average worker, large corporations scrambled to avoid it. Groups representing corporate

executives lobbied to make sure only full-time US workers would be counted, excluding the

underpaid and outsourced jobs that keep profits high. Others also asked to ease the wage

calculations by simply choosing one employee to represent the average, who undoubtedly would

be a well above average earner (Pizzigati). Assuming the public gets accurate information about

how much certain CEOs are making in comparison to their workers, the next logical step would

be to find out why the super-wealthy executives are more valuable than those with an average

(yet still large) income. Without a doubt, this information has generated considerable distrust of

CEOs by the American people. The once faithful worker has seen coworkers – or even

themselves – fired in exchange for cheaper overseas labor, while corporate executives lavish in

ever-increasing earnings with apparent disregard for hard working Americans. However, these

events were laying the foundation for a significant transformation in the modern workforce.

Due to the effects of globalization, careers have become less about the betterment of a

company and more about the betterment of an individual. Workers in the United States are now

forced to assume more personal responsibility for their financial well-being and, as a result,

display less loyalty to employers. One substantial case of this shift of responsibility is in

retirement plans. Often on the minds of employees as they plan towards the future, retirement is
 Morey 4

typically designated to be a time when work and stress end; most hope to accumulate enough

money to sustain themselves in the later years of life without working for an income. Originally,

pensions were the only form of retirement funds offered through employers, a strategy created by

firms during the industrial revolution as a way to attract the best workers and support older or

disabled employees through the payroll ("Paying for Retirement"). A pension is a collective fund

run by the employer, to which individuals contribute a set amount of their pre-tax income to

receive set benefits in their retirement. This is a reliable way to plan for retirement, especially

after the creation of the Pension Benefit Guaranty Corporation (PBGC), a government group that

will compensate workers whose companies cannot maintain their funds. An employee only has

to work/contribute income for a set amount of time to qualify before he or she may enjoy the

benefits upon retirement. Workers can know with certainty when they will retire and how much

they will receive; they even get to divert taxes to be paid upon the receipt of their pension checks

when personal tax rates are the lowest ("Paying for Retirement"). Unfortunately, the pension

retirement system is far from flawless. The idea of a collective pool of retirement money is

significantly less effective for smaller companies with fewer full-time employees and

contributors, but even a number of large corporations have underfunded pension plans

(Greenblatt). The failures of numerous high-profile companies, particularly in the steel and

airline industries, have overwhelmed the PBGC and left many workers with greatly reduced

pension returns from what they thought was guaranteed. From 1975 to 2004, six metal

manufacturers and four airlines presented claims to the PBGC worth a combined total of over

$11 billion. In 2008, two more airlines, US Airways and United Airlines, defaulted on their

pension plans, costing the federal agency $2.7 and $9.8 billion, respectively. Pensions are simply
 Morey 5

not adequate for workers to retire with peace of mind, even with a government agency operating

with a deficit of over $22 billion (Greenblatt).

With the need for an alternative to traditional pension plans, a congressional act known as

the Revenue Act of 1978 allowed for the creation of the 401(k) plan. In this retirement

investment system, employees would contribute pre-tax income, like traditional pensions, and

also receive matching contributions from their employers (Anderson). The money can then be

managed with a level of risk according to the employee’s discretion. The creation of the 401(k)

was a textbook example of adverse selection for traditional pensions. Workers who have been

paying for a pension for years are ready to begin reaping the benefits, but newer employees are

more commonly exploring the possibilities of a 401(k). At the same time, many companies are

dropping or modifying the old pension systems, abandoning the millions of workers who had

been counting on their future benefits (Greenblatt). Altogether, traditional pensions fell from a

dominant existence in over 80 percent of medium and large companies to a humble one, offered

in less than a third of those same businesses over the span of about 25 years (Billitteri). Despite

401(k)s becoming the commonplace retirement plan, especially among middle- and high-income

workers, many retirees have exposed a distinct flaw in this style of investment. Simply put, the

average worker is nowhere near prepared to manage and diversify assets to both grow a livable

income and protect themselves from the ever-volatile financial market (Billitteri). Initially meant

as a supplement to the traditional pension, the 401(k) quickly has become only option for

numerous workers hoping to save for retirement. When the stock market crashed in 2008,

accounts dwindled and forced many to either postpone retirement or try to find new ways to

support themselves. With traditional pensions, employees could (to some extent) rely on their

employers, but with 401(k)s, the companies relinquished their financial responsibilities and had
 Morey 6

no legal obligation to educate their workers on wise investment strategy (Billitteri). Initially,

companies which did educate their employees or recommend investment strategies were later

subject to lawsuits if these accounts did not succeed. As of 1994, new regulations protected

employers from the legal ramifications of poor advice, but the companies “must offer

participants at least three different investment options and provide detailed information on each

one” ("Paying for Retirement"). Even now, there are no guarantees that a company’s suggested

retirement plan is actually effective. It is truly in the hands of the employees to provide for

themselves while their companies are much less interested in helping.

Another shift towards individual worker responsibility can be seen in the downturn of

unions in the United States. Union membership has been slowly declining since the mid-20th

century for many reasons. First, the modern globalization of business has made it easier and

cheaper for companies to outsource jobs overseas. Forced to compete, employers are often left

without a choice but to search for ways to save money at the expense of high-wage unionized

workers (McCutcheon). More specific events have also made significant negative impacts on the

popularity of collective bargaining. In 1919, a strike by the Boston police caused public backlash

against unions that lasted decades. Then Governor Calvin Coolidge had to call in the National

Guard and declared, “There is no right to strike against the public safety” (Jost). Another

catastrophic blow to unionization was suffered when President Ronald Reagan stopped a massive

air traffic controllers’ strike in 1981. Since 2000, union political support has gone almost entirely

to Democrats further discouraging Republicans from supporting unions. Almost 97 percent of

the $9.4 million total political donations from AFSCME, a prominent national union, were

donated to Democrats over the span of just 10 years (Jost). Additionally, essential support from

politicians has been withdrawn due to disagreements over the Trans-Pacific Partnership, further
 Morey 7

hurting unions in recent years (McCutcheon). While labor unions were undisputedly beneficial

for early 20th century workers fighting for “safe working conditions, a minimum wage,

unemployment benefits, or protections against discrimination,” it is not as easy to see a need for

unions today (Prah). What remains in the public mind is not the continual fight for higher

minimum wages and more legal unions in the nation, but rather the infamous ties of union

leaders such as Jimmy Hoffa to the mafia and other organized crime (Prah). Altogether, union

membership has been in steady decline. In 2014, membership represented 11.1 percent of the

workforce, down 9 points from 1983 when 20.1 percent of American workers were unionized

(McCutcheon). With a decreasing ability to rely on strong or influential unions, modern

employees are often unable to depend on outside accountability for their well-being. Individuals

are required to stand up for themselves when necessary, void of company loyalty.

To be a worker in today’s economy requires an individual to look out for their own

success. In a Pew Research poll, 72 percent of Americans think that “a lot” of responsibility for

success in the workforce falls upon the individuals themselves. Only 49 percent believe that

employers have the same responsibility (“The State of American Jobs”). Americans cannot count

on unions to support them in times of trouble, and also cannot turn to their companies for

dependable retirement income. The emergence of the 401(k) as a common retirement plan has

“shifted huge amounts of risk onto the shoulders of individual workers. Not only must they

contribute to the plans from their own pockets, but they also must figure out how to invest their

retirement money in a way that will produce sufficient income in retirement” (Billitteri). As a

result of these shifts, today’s workplace features less loyalty between employers and employees

than ever before. In 2006, Pew Research reported that Americans believe that the average worker

has an employer who is less loyal to employees – and is less loyal in return – than 20 or 30 years
 Morey 8

prior. College graduates were the most likely to make this assertion, with upwards of 2/3 of those

surveyed responding that loyalty in the employer-employee relationship is down. Workers are

also described as toiling in jobs that are less secure and require harder work for fewer benefits

(“American Work Life”). Today, it is in the best interests of Americans to focus on themselves,

not their company. Personal responsibility is no longer a supplement to success, it is the

cornerstone of prosperity in the workforce.

In modern society, characteristics that define a career have become more diverse. A

willingness to make job changes throughout a career has led to the nascence of unique ways to

make a living, a crisis of absent labor protections, and the need for a less antiquated way to

analyze employment. Today’s worker rarely feels that an employer is looking out for him or her

compared to the past, and is therefore more inclined to change jobs mid-career. In 2006, Pew

Research concluded that “when looking to the future, nearly half (47%) of employed respondents

say they are very or somewhat likely to switch careers. Younger and part-time workers are more

likely to say this” (“American Work Life”). The decrease in loyalty exhibited by both the

employer and the employee make this change much simpler and common. A worker who

encounters an opportunity to better herself can now take that step with fewer grievances. Of

those who physically relocate, 44 percent say that a job or business opportunities were a major

reason for their move (Cohn and Morin). In addition to changing careers, recent years have seen

an explosion of newly created job markets, particularly due to the rise of technology and social

media. Companies such as Facebook, Twitter, YouTube, and many other social media sites have

spawned millions of employment opportunities. Facebook sponsored a study in 2014 that found

that the social internet platform was in part responsible for the creation of 4.5 million jobs

worldwide (Goldman). Among the newly created jobs are content specialists, who do the actual
 Morey 9

blogging and posting for the business, community managers who oversee all of the online

presence of the company and moderate for accurate and appropriate content, and social media

strategists who work as a new type of marketer for the firm, planning for and assessing the ad

campaigns. Some of these are repurposed names for existing workers, particularly for jobs

involving the physical creation of internet equipment, but many employees with these new titles

could have been without work if not for social media sites such as Facebook (“Social

Networks”). The creation of social media has fueled new types of work in today’s economy, but

there are other ways in which the modern job market has adapted.

Many Americans have lost jobs from the recent economic recession, from outsourcing to

other countries, or the inability to obtain a traditional job to their satisfaction. Out of these needs

was born the gig economy. A combination of freelance jobs and part-time work can yield a

decent income for someone who would be typically unemployed. Uber, Etsy, and Airbnb are just

a few of the many companies that aid individuals in this endeavor. Uber statistics highlight all of

the reasons for participating in the gig economy. About a third of drivers for the ride-hailing

service are full time workers who use the money as a supplement to their regular income.

Another third are working part time jobs in combination with Uber to approximate full time

employment. The rest have no other jobs, and are either students, parents, or unemployed in

another way (“How Gig Economy”). Services such as these can act as mediums for low effort

entrepreneurship to balance out income changes in other areas or simply to make some cash on

the side. Sometimes instead of working with a set type of job a worker will walk dogs or create

things to sell online to produce an income. This does not necessarily produce a small salary

either. A 2014 study found that the average Uber driver makes $19 an hour while on the job

(Meyer). However, entrepreneurial jobs within the gig economy are lacking one major feature:
 Morey 10

labor protections. These types of workers are subject to the variable shifts in demand for their

good or service, the lack of worker safety protections, and sudden changes in their personal

health and well-being. A non-traditional job likely means no insurance, no medical leave, no

vacation, and possibly no unemployment or workers’ benefits. With health care’s astronomically

high prices, the lack of an employer-provided health insurance can be devastating. Employees

that retire early or are fired and work part-time jobs are without health insurance until Medicare

begins at age 65 (Greenblatt). Similarly, a driver for Uber could easily get into a wreck and be

left unable to work and in serious debt. In many ways, the nationwide split from traditional

careers has left the average worker more vulnerable to the uncertainty of modern life.

In contrast to the pitfalls of a gig economy, the increased popularity of atypical jobs has

allowed workers more freedom to do what they want. The gig economy grants formerly tied-

down employees the ability to schedule as many hours as desired at times that fit into their day.

The window is open for the exploration of dreams and hobbies more than it ever was before

(Meyer). Artists, writers, and musicians may be able to further their work while supplementing

an income until they can pursue their dreams as employment. Some freelance jobs could involve

this work as well, not unlike individual contracted work. There are truly innumerable ways to

make money outside of traditional employment. While the share of workers taking part in these

jobs has increased so quickly, one interesting issue has arisen. When U.S. Senator Bernie

Sanders was running for presidential nomination during the 2016 election cycle, he told a crowd

in Maine that the actual unemployment rate was about 10.5 percent, as opposed to the official 5.3

percent (Meyer). In recent years, it seems that he had a point. Normally, economic analysts

calculate unemployment as a figure called U-3, which measures the number of unemployed

workers as a percentage of the active labor force. Senator Sanders was suggesting that U-6
 Morey 11

unemployment would be more accurate. This statistic includes all of U-3, but adds to it the total

who are employed part-time for economic reasons (such as not being able to find full-time jobs)

and all marginally attached workers (those who cannot find work and stop trying), two groups

ignored in the official unemployment rate. Especially since the most recent recession, U-6 has

grown in its share of unemployment relative to overall employment (“Total Unemployed”). This

means that even though unemployment has been trending downward, the number of individuals

without the level of work they desire has not been declining at the same rate (“Civilian

Unemployment Rate”). As this disparity increases, the official government figures become less

useful and relevant to the current unemployment situation. This shift in workers’ approach to the

modern career has rendered a measurement recorded by the U.S. Bureau of Labor Statistics for

almost 70 years obsolete, and has expanded job diversity in ways never seen before.

Following the rise of globalization and the need for companies to compete on an

international stage, many American workers were replaced with outsourced jobs. Diminished

employer loyalty to employees combined with the transition from traditional pensions to the

401(k) and the decline of unions made workers necessarily more independent in their careers,

increasingly responsible for their success, and less loyal to their companies. This shift led to a

more diverse definition of a career, the creation of new types of jobs, the birth of the gig

economy, new problems in labor protections, and the need for an updated employment indicator.

When young laborers join the workforce today, they enter an environment worlds apart from the

one their parents entered. This globalized job market is full of opportunities to succeed in new,

unprecedented ways, but with unavoidable hardships. Individuals must look out for themselves,

work hard, and remain fearless of innovation in order to flourish in their personal careers.
 Morey 12

Works Cited

“American Work Life Is Worsening, But Most Workers Still Content.” Pew Research Center's

Social & Demographic Trends Project, 29 Aug. 2006,

www.pewsocialtrends.org/2006/08/30/american-work-life-is-worsening-but-most-

workers-still-content/.

Anderson, Tom. “Your 401(k): When It Was Invented-and Why.” LearnVest, 3 July 2013,

www.learnvest.com/knowledge-center/your-401k-when-it-was-invented-and-why/.

Baran, Madeleine. "High CEO Pay Is Unfair to Workers." Corporate Corruption, edited by

Susan Hunnicutt, Greenhaven Press, 2007. At Issue. Opposing Viewpoints in

Context, ezaccess.libraries.psu.edu/login?url=http://link.galegroup.com/apps/doc/EJ3010

462212/OVIC?u=psucic&xid=38de5dbb. Accessed 5 Nov. 2017. Originally published as

"CEO Pay Reaches All-Time High As Worker's Wages Stagnate," New Standard, 31 July

2004.

Billitteri, Thomas J. "Rethinking Retirement." CQ Researcher, 19 June 2009, pp. 549-72,

library.cqpress.com/cqresearcher/cqresrre2009061900.

Cohn, D'vera, and Rich Morin. “Who Moves? Who Stays Put? Where’s Home?” Pew Research

Center's Social & Demographic Trends Project, 17 Dec. 2008,

www.pewsocialtrends.org/2008/12/17/who-moves-who-stays-put-wheres-home/.

Cooper, Mary H. "Exporting Jobs." CQ Researcher, 20 Feb. 2004, pp. 149-72,

library.cqpress.com/cqresearcher/cqresrre2004022000.
 Morey 13

Cooper, Mary H. "Paying for Retirement." CQ Researcher, 5 Nov. 1993, pp. 961-84,

library.cqpress.com/cqresearcher/cqresrre1993110500.

Derks, Scott. "2005 Selected Prices." Working Americans, 1880-2012, 2nd ed., vol. 1: The

Working Class, Grey House Publishing, 2012, pp. 587-591. Gale Virtual Reference

Library, ezaccess.libraries.psu.edu/login?url=http://go.galegroup.com/ps/i.do?p=GVRL&

sw=w&u=psucic&v=2.1&id=GALE%7CCX1546000144&it=r&asid=471b96c834f2d98

348927f49318dea5c. Accessed 5 Nov. 2017.

Goldman, David. “Facebook Claims It Created 4.5 Million Jobs.” CNNMoney, Cable News

Network, 20 Jan. 2015, money.cnn.com/2015/01/20/technology/social/facebook-

jobs/index.html.

Greenblatt, Alan. "Pension Crisis." CQ Researcher, 17 Feb. 2006, pp. 145-68,

library.cqpress.com/cqresearcher/cqresrre2006021700.

"How Gig Economy Workers Make A Living." Weekend Edition Sunday, 14 Aug.

2016. Opposing Viewpoints in

Context, ezaccess.libraries.psu.edu/login?url=http://link.galegroup.com/apps/doc/A46082

3042/OVIC?u=psucic&xid=ec381381. Accessed 5 Nov. 2017.

Jost, Kenneth. "Public-Employee Unions." CQ Researcher, 8 Apr. 2011, pp. 313-36,

library.cqpress.com/cqresearcher/cqresrre2011040800.

McCutcheon, Chuck. "Unions at a Crossroads." CQ Researcher, 7 Aug. 2015, pp. 673-96,

library.cqpress.com/cqresearcher/cqresrre2015080700.
 Morey 14

Meyer, Eugene L. "The Gig Economy." CQ Researcher, 18 Mar. 2016, pp. 265-88,

library.cqpress.com/cqresearcher/cqresrre2016031800.

Pizzigati, Sam. "CEOs Want to Hide the Gap Between Worker Pay and Their Own." Are

Executives Paid Too Much?, edited by Beth Rosenthal, Greenhaven Press, 2012. At

Issue. Opposing Viewpoints in

Context, ezaccess.libraries.psu.edu/login?url=http://link.galegroup.com/apps/doc/EJ3010

797204/OVIC?u=psucic&xid=8e65303c. Accessed 5 Nov. 2017. Originally published as

"The Paycheck Data CEOs Don't Want Us to See," OurFuture.org, 9 Jan. 2011.

Prah, Pamela M. "Labor Unions' Future." CQ Researcher, 2 Sept. 2005, pp. 709-32,

library.cqpress.com/cqresearcher/cqresrre2005090200.

“Social Networks Are Creating New Marketing Jobs.” Morgan Hunter Companies, 12 Aug.

2014, www.morganhunter.com/2011/05/18/social-networks-new-marketing-jobs/.

“The State of American Jobs.” Pew Research Center's Social & Demographic Trends Project, 6

Oct. 2016, www.pewsocialtrends.org/2016/10/06/the-state-of-american-jobs/#.

U.S. Bureau of Labor Statistics, Civilian Labor Force [CLF16OV], retrieved from FRED,

Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CLF16OV,

November 5, 2017.

U.S. Bureau of Labor Statistics, Civilian Unemployment Rate [UNRATE], retrieved from

FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/UNRATE,

November 5, 2017.
 Morey 15

U.S. Bureau of Labor Statistics, Total unemployed, plus all marginally attached workers plus

total employed part time for economic reasons [U6RATE], retrieved from FRED, Federal

Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/U6RATE, November 5,

2017.

Difference between U-6 and U-3 unemployment rates,

divided by the U-3 unemployment rate