Neoliberalism has had various definitions over the years. It is a word that can be used to describe a set of economic policies which aim to give the private sector control over the economy. Neoliberalism is based on the belief that the private sector is able to govern the economy much more efficiently than the government and produce a healthy economy for the nation.
The effects of Neoliberalism are clearly seen in many places in the society. The rich getting richer and the poor grow poorer. In most countries these policies were imposed by big powerful financial institutions and this has led to neoliberalism being very unpopular. (Steger and Roy)
Neoliberalism has been promoted by some leaders as a way of trade and investments that will ensure that all the nations in the world develop and gain equally and fairly. Among the main points of Neoliberalism is the freedom of the market. The market is supposed to be left alone.
There should be no regulation and the market is supposed to stabilize itself. Wealth distribution will therefore come about as a result of the ‘trickle down’ notion. Neoliberalism also included the removal of labor unions to allow easy capital mobility. The other points are such as; the government or state should reduce the expenditure on social services like education and health and privatization of various public enterprises such as water, electricity and even the internet.
Neoliberalism is based on the principle that free markets without the interference of states or governments will lead to the most optimal resource allocation. It also thrives on the principles that privatization of various enterprises will ensure smooth operation as it will eliminate the short comings of the public sector. (Harvey)
Neoliberalism had various negative effects on America, one of them being the decline of American organized labor. One of the points of neoliberalism is the removal of labor unions so as to allow free mobility of capital. The removal leaves workers without an umbrella to protect them from employers and big corporations.
Neoliberalism led to workers lacking a way of mobilizing their efforts. They did not have a way of coming together and organizing themselves. Organized labor goes against the principles of neoliberalism which is to abolish all regulation. Unions limit free markets and therefore neoliberalism had to wipe out organized labor through anti-unionism.
There is no doubt that neoliberalism made US workers suffer. The neoliberal reforms brought a lot of changes that benefited few people. They led to increased inequality in most parts of the world and not in the US alone. The rich grew richer and the poor grew poorer.
The policies only led to a decrease in wages of the workers and increased inequality. 30% of the workers in US earned a ‘low wage’ according Howell and Diallo (2007). And 35% of them are underemployed. The low wages were even worse since most of the US workers did not have unions to speak for them and voice their grievances.
They didn’t have any organization to offer them job protection. The anti-unionism had led to the workers having no way of organizing themselves. In addition to the low wages, the workers in US also lost health care coverage from their jobs. The number of people who get health benefits from their jobs has decreased over the years. Till today, the neoliberal policies passed by the US government are having a great impact on the workers.
Things are getting hard for them and it doesn’t seem like there is any hope in the future. Nothing suggests that there is the much needed radical change in sight. The condition of workers in the country is bad and getting worse. It is even poorer for workers of color. Though this never goes into debate as much as it should, the fact is workers of color are having it rougher than white workers. (Scipes)
The neoliberalism has been a disaster to the low and middle class citizens in the United States. And this also reflects the situation in other countries in the Global south whose governments adopted the policies. It brought about an economic as well as a social disaster that wrecked a lot of things in these areas.
Apart from neoliberalism, there were other factors that undermined the position of the working class. For instance there was the increase in supply of labor which depressed the wages. There was also the decline of old industries. Very many industries shut down. In the United States alone, over 40,000 manufacturing industries were closed. This hit the working class very hard as many people lost their employment. (Harvey)
The shifting of the economic sectors undermined the working class as well. The expanding sectors such as electronics, big box retails and fast foods did not have workers unions. They were union free companies. These companies were expanding very fast and becoming major players in their industries and the fact that they were union free had a big effect. There were also the union free regions in the US where workers did not have any organization to represent them. This too undermined the working class.
Harvey, David. A Brief History of Neoliberalism. New York: Oxford University Press, 2007.Print.
Scipes, Kim. Neoliberal economic policies in the United States: The impact of globalisation on a `Northern’ country. 2008.
Steger, Manfred B. and Ravi K. Roy. Neoliberalism: a very short introduction. New York: Oxford University Press, 2010.Print.