Invest Globally, Stagnate Locally

US and European companies continue to accumulate wealth, yet neither the overall economies nor the labor forces have joined the ride. Traditional theory once suggested that climbing corporate profits promote investment, create jobs and increase consumer demand, eventually driving up wages as well. With global markets, companies enjoy far-reaching success, maintaining control over distribution and investment of profits. In Europe, unions maintain a forceful presence, yet companies hold a trump card, forcing workers to settle for lower wages or watch jobs move overseas. The opening of new markets has shifted loyalties, and companies fly national colors less frequently. Instead, a new age of corporate “cosmopolitanism,” has emerged, most evident in Europe. While US companies draw a higher percentage of revenue from domestic markets, their growth is increasingly predicated on overseas investment as well. More worldly US firms are less likely to hire or invest in the US. Most politicians and ordinary citizens have yet to notice the disconnect between corporate performance and overall national economic performance. One possible response to the dueling forces of rising corporate profits versus sinking wages is economic nationalism. Author Daniel Gross notes that the backlash against globalization may have only just begun. – YaleGlobal