realityeconomics

Friday, January 05, 2007

Jagdish Bhagwati's comments on technology and wages

This week the FT ran an editorial by Columbia University's Jagdish Bhagwati. The title was "Technology, not globalisation, is driving wages down." We couldn' t agree more. The comments echo those of C. Fred Bergsten who recently said, "if you are against globalisation, you are against poor people." Bhagwati's point is that technology, not globalisation is responsible for the downward pressure on the wages of the unskilled, and skilled manufacturing worker. This is very very painful, but history shows that it has always been the case. Workers in today's world, both white collar workers and blue collar workers need to constantly be upgrading their skills. this entails going back to school in many cases. Also, the argument posed by Bhagwati brings us back to our thesis that the missing ingredient in today's education system is a foundation in financial and economic literacy. We cannot stop technology from coming-progress is always forward in direction. However, we can give students young and old a solid foundation in the workings of financial markets, and economics, so that they can learn how to build assets, and make those assets work as hard as they are on upgrading their skills.

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