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Thursday, January 20, 2011

Does Borderless Economy Equal, Jobless Prosperity?

Nancy Folbre:

Borderless Economy, Jobless Prosperity, by Nancy Folbre, Economix: Why has the economic recovery left workers behind? ... Many journalists argue that globalization is partly to blame... Few economists like this argument, but even some mainstream savants like Alan Blinder ... express concern about the effects of offshoring. ...
A recent Time magazine article by Zachary Karabell referred to the new joblessness as a part of a megatrend toward globalization that we just have to live with. So much depends on who “we” are.
During the 25 years after World War II, the interests of American investors and workers were closely, though not perfectly, aligned. Productivity increases were passed on in the form of higher wages that, in turn, fueled increasing demand for domestically produced goods and services.
Businesses willingly paid taxes to support public programs designed to improve the education, health and security of the labor force on which they relied. ...
Large corporations are no less patriotic now than they were then. But their economic incentives have changed. Facing intensified international competition, they have little reason to care about the nationality of their workers, consumers or investors.
Fans of globalization point to many economic benefits: lower-priced consumer goods, rewards for technological innovation and higher living standards for many workers in developing countries.
But however significant these benefits, the other side of the ledger reveals significant costs arising from political realignment and efforts to escape regulation and taxes.
Jobless growth is only one symptom of increased social conflict, intensified economic inequality and weakened democracy. The prosperity in jobless prosperity exists only for the rich.

    Posted by on Thursday, January 20, 2011 at 01:47 AM in Economics | Permalink  Comments (36)


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