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Abstract

The rapid industrialization of labor-surplus countries will present serious problems for the achievement of high levels of employment in the industrialized world. The employment consequences of a flood of imports from developing countries is jeopardizing the liberal international trading system that has contributed to the world's prosperity since World War II. The argument for free trade and a liberal system of world trade is based on a static analysis that does not countenance the rate of change imposed on the importing nation. Some intermediate stance that avoids the employment costs of unimpeded imports and the rigidities that permanent, die-hard protection will inflict on an industrialized economy may prove desirable as an aid to the process of economic adjustment.

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References

1. Eli Heckscher , “The Effects of Foreign Trade on the Distribution of Income,” Ekonomisk Tidskrift, 21:497-512 (Sept. 1919).

2. However, note the recent successes in Canada of the Korean automobile industry.

3. In this context, it is useful to distinguish between retraining a worker to acquire new industry-specific skills at the same level of sophistication and retraining to attain a new, higher level of skill. The second task is more formidable and may be impossible.

4. The idea of bumping is developed in E. Ray Canterbery , “A Vita Theory of Personal Income Distribution,” Southern Economic Journal, 45:12-48 (July 1979).

5. Vitor F. Zonanna , “Population Puzzle,” Wall Street Journal, 20 June 1984.

6. Intergenerational change assumes improvement in the skills developed in the formative years as a result of better educational and home support.

Dan Usher , “The Transportation Bias in Comparisons of National Income,” Economica, 30:140-159 (1963).

8. Wolfgang Michalski , “The Need for Positive Adjustment Policies in the 1980s,” Intereconomics, 18:42-48 (Jan.-Feb. 1983), develops the concept of the need for resilience if mature economies are to perform well.

9. The French experience in steel and the British experience in coal in the spring of 1984 are cases in point.

10.

10. See C. L. Schultze , “Industrial Policy: A Solution in Search of a Problem,” California Management Review, 25:5-15 (Summer 1983).

The Internationalization of Global Labor Markets

Abstract

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References