Globalization and the American Economy

Learning Target 32: ​Analyze how the American economy has been impacted by improved global communications, international trade, transnational business organizations, overseas competition, and the shift from manufacturing to service industries.

The American economy has been impacted by many influences since the early 1990s. Global communication has rapidly increased use of technologies such as the personal computer, Internet, and mobile phone.

Business organizations that operate internationally with production facilities in more than one country have grown rapidly by large numbers. For example, an American automobile might have parts imported from several countries and assembled in yet another country. Overseas competition has challenged American producers and local communities.

​A trade deficit is when the value of a country's imports exceeds the value of its exports. A trade deficit can cause outsourcing of jobs. When countries import certain goods rather than buying domestically, local industries start to go out of business. The U.S. trade deficit has increased in recent decades. This has led to a decrease in manufacturing jobs and closing of plants. It has also contributed to a shift toward service industries and a growth in lower paying jobs in fast food and sales.