Regional perspectives on World Development Report 1995 : the employment crisis in industrial countries : is international integration to blame?
Revenga, Ana
The industrial countries are in the midst of a long-term employment crisis typified by persistent unemployment in Europe and risingg wage inequality in Australia, Canada, the United Kingdom, and the United States. At the same time, the industrial countries have experienced a surge in international interactions with countries that have large numbers of much poorer workers -- that is, with developing economies and, increasingly, those in transition from central planning. Many commentators portray these two developments as connected. There is a concern that workers in industrial countries -- especially unskilled workers are losing out as low-wage economies like China take over production of labor-intensive goods and middle-income countries like Mexico upgrade into the production of more skill-intensive products. Apprehension over job losses and declining wages is exacerbated by fears of multinational capital heading to lower-cost producers in Eastern Europe, Latin America and Asia. This report analyzes these linkages. It concludes that the fortunes of industrial country workers and their counterparts in poorer countries are indeed interconnected but that international linkages account for only a small part of the plight of those suffering long-run unemployment or declining wages. It also concludes that future gains from rising interactions with the developing and transition economies are likely to outweigh the losses.
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