Achieving world class excellenceCurrent situation:
Globalization and offshoring has had profound impacts on US jobs over recent decades. Currently, we believe this trend is being challenged by global political tensions as nationalists and Brexit oppose the movement towards a global economy.
Have we reached ‘peak globalization’? …a temporary plateau?
It’s impossible to predict if globalization will ultimately resume, if the movement will stall, or dissolve. Nonetheless US reactions to international tensions are becoming the new normal.
We ask: What is the likely near-term impact on US workers and jobs?
Current drivers and trends:
- The expansion of sanctions between the US, China, Iran, Syria, Venezuela, Russia etc.
- Changes in US Foreign Policy in response to tensions and disorder in the Middle East, Strait of Hormuz and Hong Kong.
- The US is becoming self-sufficient through fracking and renewable energy sources.
- Wage growth in China has challenged companies that took advantage of the cheap labor. To date, there is no substitute in the manufacturing industry to replace the capacity and capability.
- The trends listed above will likely lead to an increase in the costs of goods and services in the US. This includes the basic cost of living
- US businesses will be less likely to invest in foreign countries that are less culturally and politically aligned with US policy.
- International ‘shock’ events will may trigger sudden impacts on US firms with overseas integrations and dependencies.
- International responses may trigger sudden impacts on US firms with overseas interests.
- US employers will likely reduce their overseas operations, including jobs.
- Employers, trying to deal with the higher cost of goods, may lower wages or resort to lay-offs, to reduce costs.
- US employees will need to absorb higher costs of living. Simply put: a dollar will not go as far.
- Some work previously outsourced overseas will (slowly) begin to return to the US.
Your employment situation will direct how much time you spend on each bullet. For more information on the levels of investment read The Career Management Life-cycle.
- Anticipate and plan for higher costs of living.
- If your employer has any dependency on overseas suppliers or operations, expect and anticipate disruption.
- When considering a job opportunity or offer, be cautious and undertake greater due diligence if that employer has large international dependencies.