Page 217 - Global Political Economy_Understanding The International Economic Order

CHA PTER E IGHT
A large number ofAmericans, particularly organized labor, blame
manufactured and other imports from low-wage economies for in-
come inequality and job insecurity and demand restrictions on im-
ports. Protectionists like Ross Perot and Patrick Buchanan have asked
how an American worker earning $20 or more an hour could possi-
bly compete against billions ofChinese, Indians, Indonesians, and
Bangladeshi earning less than $.20 an hour! This unfair competition
from low-wage countries, many proclaim, has been rapidly advancing
up the technological ladder so that it is harming a growing number
ofwhite-collar workers; India, for example, has become a world-class
center ofdata processing and software development. Globalization
has also increased immigration ofworkers from poorer countries into
the advanced industrial countries, workers who then “take jobs
away” from local workers. Therefore, many critics of globalization
charge that increased trade flows, “run-away” plants ofAmerican
multinational firms, and immigration are responsible for the deterio-
rating economic plight ofmore and more workers in the United
States.
Most American economists have disputed these charges and attrib-
uted almost all ofthe relative decline in the wages oflow-skilled
American workers to technological changes within the American
economy itself. Technological advances such as the computer and in-
formation economy, they have argued, significantly decreased the de-
mand for low-skilled workers and greatly increased the demand for
skilled, especially college-educated, workers. Furthermore, these
economists have noted that the relatively small trade flows between
the United States and low-wage economies cannot possibly explain
the roughly 30 percent difference in wages between skilled/college-
educated and unskilled workers in America. Instead, this decline in
the wages oflow-skilled workers has been due to such technological
developments as automation, lean production techniques, and com-
puterization.
At the beginning ofthe twenty-first century, advanced economies
are rapidly shifting from unskilled, blue-collar, labor-intensive indus-
tries to service industries and to greater reliance on skilled labor in
manufacturing as well as in other aspects of economic life. This struc-
tural change parallels the shift from agriculture to manufacturing in
the late nineteenth century when, as agriculture became more mecha-
nized, superfluous farm workers migrated from the land to the fac-
tory. In the late 1990s, many of the tasks formerly performed by
unskilled and less skilled workers were being carried out by comput-
ers and automated processes. The new service- and knowledge-based
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