Thursday, September 8, 2011

Globalization and (un)employment

There was a survey of developments in labor markets in the Economist here, which didn't really add a lot. But it did refer to an article by Nobel-winning economist Michael Spence in Foreign Affairs last issue. There was one remarkable fact:

Between 1990 and 2008, the number of employed workers in
the United States grew from about 122 million to about 149 million. Of the roughly 27 million jobs created during that period, 98 percent were in the so-called nontradable sector of the economy, the sector that produces goods and services that must be consumed domestically.

Incidentally, the 'tradable goods' sector is an economics term for the sector of the economy which produces goods for world markets - eg iPods - versus non-tradables, which are not sold in world markets, like haircuts in Brooklyn or ER services in Seattle. The "real exchange rate" is the ratio between traded and non-traded goods.

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