Growing Apart: The Causes and Consequences of Global Wage Inequality

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October 15, 1999, New York, NY - Is globalization a major contributor to increasing wage inequality? A new Council on Foreign Relations Press book edited by Albert Fishlow and Karen Parker, Growing Apart: The Causes and Consequences of Global Wage Inequality, says it is not.

The authors of Growing Apart show that there is no simple link between the forces of globalization and increased wage inequality, either in the United States or in several other countries. Several interrelated market integration developments—expanded trade and foreign investment, more rapid technology diffusion, and changes in labor market structure—all influence wages.

As a consequence, the book’s authors claim, the correct conclusion is not to restrict international trade and the flow of service activity. They cite evidence that shows how expanded trade and competition at the global level raises living standards and creates more high-wage jobs. The real requirement, they say, is to help all workers adjust through better initial education, as well as by offering subsequent re-training possibilities.

The volume is the product of a Council study group co-chaired by Jessica Einhorn and John Lipsky. Growing Apart was co-edited by Albert Fishlow, then-Council on Foreign Relations Paul A. Volcker Senior Fellow in International Economics, and Karen Parker, Director of Currency Research at Chase Manhattan Bank. Individual chapter authors are David Blanchflower, Steven Camarota, J. Bradford Jensen, Mark Krikorian, Lisa Lynch, Theodore Moran, Richard Freeman, Matthew Slaughter, and Kenneth Troske.

The Council on Foreign Relations, founded in 1921 and based in New York, is a national nonpartisan membership organization and think tank dedicated to fostering America’s understanding of other nations through study and debate.