I have a problem with the economic radius of our libraries. They are monopolized by the tests denouncing the horrors of globalization and neo-liberalism globally. No wonder we are the world champions of liberalism, according to this survey 2005 International (click the graphic at left to enlarge). The argument developed is almost always the same: addressing social dumping from countries like China, our economy is weighed down by high wages and an expensive welfare. Result: either we close our factories, it is cutting back on salaries and benefits in a terrible downward spiral. While it still manages to export high-tech stuff but it does not employ anyone, and least qualified to remain on the tile. In short, in return for plasma TV and DVD players cheap, globalization brings poverty, insecurity, unemployment and deficits. Nice progress!
against the current of the intellectual rebellion, I found some essays of economists I think that's sensible. They argue that globalization is mostly a convenient scapegoat that prevents us from questioning the shortcomings of our system. It deserved to go and get a closer look: zoom this week on the links between globalization, unemployment and wages. Which are not necessarily those we think.
Unemployment is it soluble in international openness?
dint of losing market share in sectors that employ the most labor, logic would dictate that rich countries with high wages can see both the trade balance deteriorated and unemployment increased. I am amused to compare the employment rates of each country's trade balance. The least we can say is that the logic [rich country => Imports = high> unemployment] does not jump to mind:
first finding the balance Business clearly has little to do with the level wages. Or rather, if one seeks a correlation, it is rather the opposite of what one would expect. The poorest European countries (Portugal, Spain) are big net importers, while the richest countries (Sweden, Netherlands, Germany) are net exporters. The same goes for developing countries (on this site example), the trade balance is very positive now (China), sometimes very negative (India).
Then, the link between unemployment levels and trade balance is far from clear. As for net exporters (right graph), the Netherlands and Norway show indeed a low unemployment rate, but this is not the case of & # 39; Germany for example. The situation is equally ambiguous for net importers (left graph): While France, Spain and Italy have higher rates of poor jobs, but the ; Australia New Zealand (and even the U.S.) had no employment problems in 2008.
Several studies have attempted to make a balance-jobs of globalization in France and their evidence is mixed: sometimes the balance is positive (between 1990 and 1997) and sometimes slightly negative (between 1997 and 2001). But in any case, the number of jobs created or destroyed is tiny, about 10 000 per year, compared with a straw 250 000 jobs lost in 2009 ...
Who said that nations were "economic war"?
The weak influence of international trade on employment is better understood when we realize how much our trade with developing countries is limited. According to the WTO , goods from poor countries (Africa, Asia, South America) does not even represent 20% of imports from the European Union in 2008 . These imports that make us so afraid represent less than 6% of European GDP. As noted economist Paul Krugman , if one were to compare two nations to Pepsi and Coca-Cola, it would have to imagine that each company makes 90% of its sales to its own employees and the remaining 10% from those of its competitor: no trivial as competitive situation!
Besides the very concept of "competitiveness of a nation" is in itself questionable: for a business is easy, its competitiveness is measured by net income. In the case of a nation, should we take the budget deficit, its growth, unemployment rate, its standard of living? And then we saw here everything a nation that mattered was offset by an exchange in the opposite direction, whether through exports, financial services or investments . Relations between nations are those customers suppliers rather as suppliers compete with each other. Finally and most importantly, the idea of an economic war between nations which evokes a fight come out winners and losers. Yet that is precisely what economists disagree: they believe international trade is anything but a zero sum game because the growth of international trade increases the size of the GA teau economy. And it's true that if we analyze the statistics of the WTO since 1950, we must recognize International Exchanges and economic growth appear to go together:
there reason d & # 39; fear of low wages?
course, could there be to object, but it does not answer the question of social dumping. How do they resist our economies to unfair competition from Chinese companies, combining low wages and productivity the first world? This concern requires a country to artificially maintain her wages at a very low level. As unorthodox idea, since in theory wages and productivity are inextricably linked, but at least it is a testable hypothesis. Armed with my stats I'm comparing hourly wages and productivity in the world. That's what happens:
Above right, the most developed countries (Norway, Germany, Denmark, Netherlands, France ...) have both hourly wages and productivity high. At the other end of the scale (bottom left), Mexico, Portugal and Korea have low wages and low productivity. Roughly productivity and wages are linked even if obviously disparities (Denmark for example has a lower productivity than the United Kingdom, but higher wages).
What about the evolution in time? Again, the statistics I gleaned on the subject seemed to me conclusive. Increased productivity and higher wages are associated regardless Country:
Source: Course Philippe Martin (Ecole Polytechnique, 2004)
Developments Korea since 1970 is a good example (source here). While productivity (Expressed as a percentage of that of U.S.) increased from 14% in 1975 to 69% in 1995, its average hourly wages rose during the same period of 5 to 43% % (always expressed as% of wages in the U.S.). From my 2008 statistics, it is now 60% that of the United States. Basically, this correlation is more logical than it looks: the standard of living of the inhabitants (= salary) increases as the country 's ; enriches (wealth Productivity = output = x number of workers) and I do not see why China would escape such a catch-up phenomenon. As it is generally more productive, their wages go back as naturally elsewhere.
is the comparative advantage that counts!
economists go even further: since the nineteenth century and e theory Ricardo (improved but never contradicted my knowledge) they argue that a country does not export goods in which it has improved productivity in absolute value , but those for which it has a relative advantage . It illustrates the usual theory, taking the example of two countries (England and Portugal) exchanging two goods (cloth and wine). Suppose only 10 hours, Portugal produces 20 meters of cloth and 300 liters of wine while England produced only 10 yards of cloth and 100 liters of wine. Portugal is much more efficient value absolute on both productions. Yet he has an interest in specializing in wine production and import his cloth of England (see the explanation on Wikipedia or this site for example). Each country grows rich from foreign trade by leveraging its comparative advantage, not its absolute advantages as we tend to believe.
Not very clear? OK, here's an example more intuitive widely popularized by the classical economic literature (And obviously a tad sexist): Imagine a lawyer champion keyboard. His secretary then has no absolute advantage over him: she is not a lawyer and type as fast as him. Yet the lawyer is always advisable to entrust his correspondence (unless there is another who types without blocks) because he did not have time to do everything. Each specializes in the task for which he has an advantage on and the tandem is more productive overall.
This is probably that globalization makes us evil: it requires that countries specialize where they are (relatively) soon and gradually abandon areas where they have no comparative advantage. It requires at least two drastic changes in our economic policy: it must firstly enormous efforts to help workers adversely affected sectors to retrain, Pluto , t wade that maintain their activity in broad strokes / cost of subsidies. Then, the state must give up its independence in certain economic areas such as agriculture, fisheries and certain strategic industries. For a country like France, it means giving up part of our cultural exception. Not easy to accept ...
Sources: Some excellent essays
economy: The economy without taboos Joseph Heath, Our economic phobias (author of the blog econoclaste ) Unemployment fate or necessity? of Cahuc and Zylberberg, France is unfair of Timothy Smith. Two tickets
Paul Krugman ( here and there )
Does Trade with Low Wages Hurt American Workers? Stephen Golub
Statistics 2010 Bureau of Labor Statistics
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The record trade deficit: it serious doctor? Ticket which gives the recipe for the trade balance by ruining his country.
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