Technology, Not Globalization, Is Driving Wages Down

Confronting wage stagnation, US labor groups blame trade and immigration from developing countries. But economic research does not support the assertion that competition with developing nations reduces either wages or bargaining power, argues Columbia University professor Jagdish Bhagwali of Columbia University. If anything, ongoing technological innovations reduce the need for unskilled labor, causing wage stagnation despite raises in productivity. “This process is continuous now – unlike discrete changes caused by past inventions such as the steam engine,” writes Bhagwali. He concludes that such steady technological advances have little to do with globalization. Workers cannot count on their technological surroundings to stay the same for a year let alone their full career. – YaleGlobal