The quote discusses the impact of globalization on wages across different economies around the world. It suggests that as countries integrate into a global market, there's an eventual balancing or "convergence" of wage levels between emerging markets and developed nations. This process is seen to result in a gradual decline in real wages within Europe, highlighting how economic integration can lead to shifts in labor costs.
Digging deeper into this statement reveals the complex dynamics at play within the global economy. The concept of convergence implies that as poorer countries develop and become more integrated with richer ones through trade and investment, their wage levels are likely to rise over time. However, this upward trend for emerging markets comes with a downside: it exerts downward pressure on wages in developed economies like those in Europe. This phenomenon can be attributed to factors such as increased competition from low-cost labor sources and the offshoring of jobs that were previously performed by higher-paid workers in advanced countries.
The quote is authored by Guy Standing, an economist known for his work on labor issues and the precariat, a term he coined to describe the growing class of precarious workers who lack job security and stable incomes. His insights often focus on how global economic trends affect employment conditions and income distribution across different segments of society.
