Does Globalization Lower Wages and Export Jobs?
Globalization—the international integration of goods, technology, labor, and capital—is everywhere to be seen. In any large city in any country, Japanese cars ply the streets, a telephone call can arrange the purchase of equities from a stock exchange half a world away, local businesses could not function without U.S. computers, and foreign nationals have taken over large segments of service industries. Over the past twenty years, foreign trade and the cross-border movement of technology, labor, and capital have been massive and irresistible. During the same period, in the advanced industrial countries, the demand for more-skilled workers has increased at the expense of less-skilled workers, and the income gap between the two groups has grown. There is no doubt that globalization has coincided with higher unemployment among the less skilled and with widening income inequality. But did it cause these phenomena, as many claim, or should we look to other factors, such as advances in techn
