Title: In what way has globalization effected unemployment?
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Content: In addition international trade between skill-scarce less-developed countries and skill-abundant rich economies has increased since the 1970’s, and this may have put downward pressure on the wages of low-skill workers in the U.S. (Acemogly, 2000). What used to be done by low skilled workers in the U.S., it is probably getting done in sweatshops across Asia. Nonetheless, these sweat shops are all these Asian workers from the other side of the world have to survive. The famous Cambodian sweatshops to us might be unimaginable, but to the people living there is the only way of making their daily bread. Income gaps have widened in a number of developing countries as well as in the advanced economies, and evidence suggests that labor demand in developing countries has also shifted toward workers with high skill levels relative to the average. For example, research reveals that trade liberalization in Mexico in the mid-to-late 1980s led to increased relative wages of high-skilled workers. We might have expected trade liberalization to boost the demand for unskilled labor and raise unskilled wages, but in fact the opposite has happened in some developing countries (Slaughter and Swagel, 1997). These changes in wage inequalities are linked directly with the technological changes that were brought to the international economical sphere due to the globalization and the easier movement of capital, labor, and resources. Another dimension of globalization is the growth of the international capital market. Financial flows across countries now dwarf the levels of only few years ago.