What effect does globalization have on local labor markets?

Globalization has a significant impact on local labor markets, primarily by leading to job displacement and wage suppression. As economies integrate on a global scale, companies often seek to reduce costs by outsourcing jobs to regions where labor is cheaper. This creates competition for local workers, often resulting in job losses in certain sectors as positions are moved overseas.

Additionally, the influx of cheaper imported goods can also suppress wages for lower-skilled jobs in local markets, as domestic employers may feel less pressure to offer competitive salaries when they can rely on cheaper imports. This combination of job displacement and wage pressure can create a more precarious employment situation for many workers, especially those in industries that are heavily affected by globalization.

The other options do not accurately represent the typical outcomes associated with globalization. Increased unionization does not necessarily correlate with globalization, and in fact, the pressures of global competition can weaken unions. Job stability for all workers is often compromised in a globalized economy, as jobs can shift rapidly, and higher wages for low-skilled workers are unlikely in such an environment where competition drives costs down.