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This is essentially what has happened over the past decades, as China has moved from isolation to deeply integrated into the global economy. When the country joined the World Trade Organization in 2001, its population of 1.28 billion was larger than that of the 34 advanced countries combined that make up the Organization for Economic Co-operation and Development (1.16 billion) .
But it was a one-time adjustment, and wages are rising rapidly in China as it moves beyond low-end manufacturing and into more sophisticated products. India, the only other country with a comparable population, is already well integrated into the global economy. As globalization continues, it should be a more gradual process.
9. There is only one Mexico
For years, American workers also competed against low-income Mexicans after the promulgation of the North American Free Trade Agreement in 1994. As with China, the new dynamic has improved long-term economic prospects. term of the United States, but the short term running was bad for many American workers.
But it was also a one-time adjustment. Even before President Trump, most of the trade deals under negotiation no longer focused on facilitating imports from low-labor-cost countries. The main objective was to improve the trade rules of American companies doing business in other wealthy countries.
10. The offshoring revolution is mainly played out
Once upon a time, if you were an American business that needed to operate a customer service call center or do some labor intensive IT work, you had no other choice than to hire a group of Americans to do it. The emergence of instant, low-cost global telecommunications has been a game-changer, allowing you to work where costs were lowest.
During the first decade of the 2000s, American companies did just that on a large scale, locating work in countries like India and the Philippines. It’s a slightly different version of the earlier farm analogy; a Kansas customer service operator was suddenly competing with millions of low-income Indians for a job.
But it’s not like the Internet can be invented a second time.
Do you sense a theme here? In the early years of the 21st century, a combination of globalization and technological advancements put American workers in competition with billions of workers around the world.
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