17 Winners and Losers

17 Winners and Losers - Winners and Losers in the Global...

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Unformatted text preview: Winners and Losers in the Global Economy Monday, November 06, 2006 Largest Manufacturing Countries 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 U n i t e d S t a t e s J a p a n G e r m a n y F r a n c e G r e a t B r i t a i n B r a z i l C h i n a I t a l y C a n a d a A r g e n t i n a S p a i n T a i w a n A u s t r a l i a S w i t z e r l a n d $US Millions Distribution of Manufacturing Production North-South Shares of World Manufacturing 20 40 60 80 100 120 1953 1963 1970 1980 1990 1995 North South Distribution of LDC Manufacturing South Korea 13% Brazil 12% China 12% Argentina 8% Taiwan 6% Rest LDC 30% Singapore 2% Hong Kong 1% Philippines 1% Malaysia 2% India 2% Indonesia 3% Mexico 4% Thailand 4% North-South Distribution of Foreign Direct Investment 84 86 88 90 92 94 96 98 100 102 1960 1975 1985 1990 1995 Percent of Total North South Distribution of LDC FDI China 19% Mexico 9% Singapore 8% Indonesia 7% Brazil 7% Malaysia 6% Rest LDC 31% Argentina 4% Saudi Arabia 4% Hong Kong 3% Thailand 2% The Global Division of Labor • Advanced Industrialized Countries – Comparative Advantage in Capital and Human Capital Intensive Goods—Pharmaceuticals, Computers and Software, Telecommunications Systems, Aircraft. • Asian Newly Industrializing Countries – Comparative Advantage in Mature Capital Intensive Goods—Steel, Semiconductors, Autos. • Other Developing Countries – Comparative Advantage in Labor Intensive Goods (Apparel & Footwear; Assembly) and in Primary Commodities. Who Wins and Who Loses from Globalization? • Three Possible Answers • 1. Everybody Wins (Classical Trade Theories) 2. The “New Left” Answer • “Capitalists” Win— Especially the Evil MNCs • “Labor” is the Big Loser • If You Want More Nuance: American Labor Can’t Compete Against Third World Workers “Who Aren’t Even Paid a Living Wage.” Comparative Labor Costs, 2002 Country Hourly Compensation United States 100 Germany 118 United Kingdom 82 Taiwan 25 Singapore 34 South Korea 43 Mexico 11 Sri Lanka 2 Source: US Bureau of Labor Statistics, 2003 A. Can’t Look At Wages: Productivity Differences Must Be Taken Into Account B. It’s Simply Not Correct 3. It Depends Upon… • What Kind of Work You Do....
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17 Winners and Losers - Winners and Losers in the Global...

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