Very likely they include changes in technology, especially computerization, which have reduced the demand for low-skill workers. But whatever the impact of globalization on poverty and inequality, it plainly has grave political consequences . By spreading wage competition to a global labor pool, immigration, free trade, and capital mobility severely weaken organized labor and make its revitalization difficult. By the same token, these factors strengthen the political power of multinational businesses. Policy makers who care about their nation's economic future are increasingly at the mercy of financiers and businesspeople who can tell them which policies are acceptable.
Governments have to compete with each other to provide the most lucrative business climate.
Thus it might well fall victim to an international race to the bottom in social policy. Solutions would have to be truly global, shifting power from capital back toward labor on a world-wide scale. They would have to involve such things as the organization of workers in poor countries, cooperation by labor across national borders, and the negotiation of international agreements on workplace health and safety and the environment, which would raise labor costs abroad and dull the sharpest edges of international wage competition. Such measures seem to me very much worth working for, so long as they do not excessively dim the economic prospects of workers in poor countries. But the magnitude of the task of dealing with international wage competition suggests just how difficult it may be to enact policies that will provide job opportunities and decent incomes for all Americans.