Stephen Bové - Art, Technology, Right Action

Friday, February 23, 2007

Global Workforce, Global Wages

Great stats and commentary from Gabor Steingart in Speigel

"In 1980, the sum of all countries' direct investments, that is, the funds a given nation invests outside its own borders, amounted to only $500 billion. Total worldwide direct investment has now jumped to $10 trillion, an increase of almost 2,000 percent in only 25 years."

"The West's workers have become a minority. The Chinese joined the club a short time later, followed, in the wake of the collapse of the Soviet Union, by Eastern Europeans and Indians. Within what amounts to little more than a blink of the historical eye, some 1.2 billion additional workers entered the labor market. This massive influx has led to a sharp shift in the balance of power: The West's 350 million well-trained, but expensive workers, who until recently were responsible for a large share of global production, became a minority virtually overnight."

"The addition of billions of willing workers has set off a process that will soon change the fundamental structure of Western societies."

"Of the roughly 3 billion people currently active on the global labor market, about half earn less than $3 a day, which means two things: First, these people are dirt-poor and, second, their poverty wages are forcing down the wages of other, better paid workers."

"No one should expect a rapid rise in incomes in the Far East or Eastern Europe, where the fact that millions of farmers and slum dwellers are still waiting for industrial employment creates an additional downward pressure on wages."

"Even though the labor market has lost its borders, Western workers have no choice but to remain where they are."

What this means for the totality of western economies is a question of historically unprecedented proportions.

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