An outline of the


Attachment 1 Charts from ILO World Labour Report 1997-98



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Attachment 1

Charts from ILO World Labour Report 1997-98


Study

Issues

Results

A. Wood (1994) and (1995)

Factor content analysis - measures impact of trade with 'south' on the wages of unskilled workers in the 'north'.

Finds the impact of trade to be 10 times the magnitude of previous 'small effects' studies. Makes the assumption that all manufactures' imports are non-competing (other than processed primary products) and that productivity in the 'south' is the same as in the 'north'.

R. Freeman (1995)

Tests whether "Your wages are set in Beijing" by reviewng conceptual linkages between trade and the labour market.

Believes that the impact of trade on wage inequality is exaggerated. Argues that much of the labour market has wages not according to domestic conditions. Regards other factors - technology and political events as more important than trade flows.

A. Singh (1997)

Tests the Wood analysis in terms of economic strategies for both 'North and South' (industrialised and developing world).

Rejects 'North-south' division inherent in Wood analysis. Questions Wood's assumptions and argues that any study that assumes a neo-classical labour market in North and South economies is deficient. Argues that a pro-growth strategy for the 'North' is ultimately beneficial for the 'South'.

James K. Galbraith (1996)

Tests Keynesian theory on question of North-South trade in manufacturing, industrial location from North to South, rising wage inequality and unemployment in the North.

Argues that Keynesian theory best captures the dynamics of the North-South relationship and especially the influence of Northern macroeconomic policy and North business cycles on industrial trading patterns.

Machin, Ryan and Van Reenan (1996) cited in OECD (1997)

Tests the impact of trade and structured change on workers' wages bill and employment share.

Found in the UK and USA that industries with higher unionisation levels experienced less downgrading of the relative wages and employment of unskilled workers.

Belman and Lee (1997)

Surveys empirical tests of the effect of trade on manufacturing employment in the US.

Four main conclusions are drawn:

1. Employment effects greater than wage effects.

2. Negative consequences of imports for wages increased in 1970s and 1980s.

3. The large employment effects of trade suggest considerable job mobility (often from manufacturing to the service sector).



4. Loss of wage leadership in manufacturing has affected wage bargaining throughout the economy.

Speech to the Globalisation, the Asian Crisis and the Future of Australian Industry - Jobs and Infrastructure Conference, Tom Mann Theatre, 136 Chalmers Street, Surry Hills, Sydney. 16 March 1998. By Tim Harcourt, ACTU Research Officer.


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