Globalization- A Win-Win?

The OECD (Organization for Economic Cooperation and Development) on Tuesday issued its report on jobs policies and the effects of globalization. Their conclusion? Globalization is good but people are earning less of the wealth generated by economic growth and integration. Got that? Screw what you make, it's all good.

Although they reasserted their support for 'free trade', 'free markets' and investment, they did acknowledge that perhaps it was time to look at the darker side of globalization. As OECD Secretary General Angel Gurria stated, "Millions are benefiting from globalization but at the same time there's a feeling that something is wrong with the process" and believes that governments need to address public concerns over jobs and pay in a ever rapidly changing world that is seeing the rise of cheap labor from countries such as China, Russia, India and Brazil. This 'it's really good but has bad side effects' take was also reflected by the author of this report, Raymond Torres. He says "It's still a win-win process for all countries. But just because markets are good for growth, not wanting to see these vulnerabilities would be counter-productive".

The report then goes on to look at wages around the globe and finds some startling numbers. For example, in Japan, wages have fallen more than 25% as a share of GDP in the last 30 years, 15 % in Western Europe and 7% here in the United States. The report also showed the wider gap between rich and poor. "It's quite remarkable" was the response from the reports' author. Quite remarkable? That's all? This is the 'win-win' he talks about?

The topic of offshoring jobs was downplayed by stating that people were under the false impression that it was a bigger problem than it actually was. Torres says quite bluntly "The 'job for life' is dead. In order to reap the benefits of globalization you have to move. Enterprises have to move into new areas, new niches, and people have to move into new enterprises. The thing now is to protect people, but not protect jobs, because some jobs have no future."

Their conclusion? Gurria acknowledged that some people had lost out, but this was something policies should tackle because globalization was a positive and in any case inevitable process. "It's how you make the best out of it," he said. "We have to convince people."

I have never read such doublespeak in my life (well not lately, anyways). It is unbelievable that a pro-globalization group can state with a straight face that the process is good but the benefits are not and that everyone just needs to be convinced that lower wages and job instability are the norms today. Sigh...