Hardly a Flat World

Brad Setser asks us to read Stephen Roach, so I did. Roach is offering his critique of the current globalization model:

... the asymmetries of globalization have an equally profound effect on the other side of the ledger -- on workers in the rich, developed world.  Over the past five years, industrial world labor markets have suffered from both jobless and now wageless recoveries. The US, with the world’s most flexible labor market, has been on the leading edge of these trends. While hiring has picked up over the past 24 months, the private sector job count remains more than 10.5 million workers below the profile that would have been generated by a more typical hiring cycle. Moreover, the inflation-adjusted hourly pay rate is virtually unchanged over the 46 months of this recovery -- underscoring the rare confluence of surging productivity growth and stagnant real wages. At the same time, structural unemployment remains a serious problem elsewhere in the developed world -- especially in both Europe and Japan, And make no mistake -- workers in the developed world are far from pleased over this outcome and the global context in which it has arisen.

Brad also pointed to a NYT story about the fall out of Delphi and GM job losses in Michigan. Incidently, the times story is a part of a series titled Rewriting the Social Contract.
It is generally understood that current model of globalization has several advantages. It is also quite clear however,  that nobody really understands the secondary consequences of the current globalization model well, at least not yet. I keep looking for answers.

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