This article analyzes the implications and consequences of globalization for employment in developing countries and industrialized economies. It shows that, starting 1980, economic growth has slowed down and unemployment levels have been higher, while employment creation has been slower, as compared with the preceding three decades. Such jobless growth, which is the outcome of policies that have stressed more openness in trade, investment and finance, has dampened output growth through a worsening income distribution. The problem has been accentuated by orthodox macroeconomic policies that stress price stability and balanced budgets. Instead, if macroeconomic policies focus on fostering employment creation and supporting economic growth in the national context, employment would revive growth and reduce inequality. This would also be conducive to growth with stability in the world economy.
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For a discussion on the possible meanings and essential characteristics of globalization, see Nayyar (2006).
This argument is developed, at some length, in Nayyar (2007a, b).The evidence on growth rates in GDP and GDP per capita during the periods 1951–1980, 1981–2008 and 2009–2012, cited here, is drawn from Nayyar (2013), which also provides disaggregated data for country-groups and regions in the world economy.
For an analysis of the impact of the financial crisis and the Great Recession on the world economy, see Nayyar (2011a, b).
For a lucid analysis of this era in the industrialized countries, see Marglin and Schor (1990).Between 2007 and 2009, global unemployment increased by more than 30 million, of which three-fourths was in industrialized countries and one-fourth was in emerging economies. The unemployment rate increased by 3 % points in the industrialized countries and by 0.25 % points in the emerging economies. The youth unemployment rate increased from less than 20 % to more than 40 % in Spain, while the proportion of those unemployed for more than 6 months in the total number of the unemployed rose to almost one-half in the United States (Nayyar 2011a).
For evidence on trends in employment, and on unemployment rates among males/females or adults/youth, during the period from 1991 to 2013, in country-groups differentiated by income levels, see ILO (2014).
