Growing Apart

Is globalization a major contributor to increasing wage inequality? Growing Apart: The Causes and Consequences of Global Wage Inequality says it is not. Economists Albert Fishlow and Karen Parker show that there is no simple link between the forces of globalization and increased wage inequality, either in the United States or in several other countries. Several interrelated market integration developments--expanded trade and foreign investment, more rapid technology diffusion, and changes in labor market structure--all influence wages.

As a consequence, the book’s authors claim, the correct conclusion is not to restrict international trade and the flow of service activity. They cite evidence that shows how expanded trade and competition at the global level raises living standards and creates more high-wage jobs. The real requirement, they say, is to help all workers adjust through better initial education, as well as by offering subsequent re-training possibilities.

A Council on Foreign Relations Book