This is essentially what has happened in the last few decades, as China has been isolated from being deeply integrated into the world economy. When the country joined the World Trade Organization in 2001, the population was 1.28 billion larger than that of the combined 34 advanced countries that make up the Organization for Economic Co-operation and Development (1.16 billion).
But it was a one-time adjustment, and wages are rising rapidly in China as it goes beyond low manufacturing and toward more sophisticated goods. India, the only other country with a comparable population, is already well integrated into the world economy. To the extent that globalization continues, it should be a more gradual process.
9. There is only one Mexico
For years, U.S. workers also competed with low-income Mexicans after the entry into force of the North American Free Trade Agreement in 1994. As with China, the new dynamics improved the long-term economic outlook for the United States, but in the short term running, it was bad for many American factory workers.
But it was also a one-time adjustment. Even before President Trump, negotiated trade agreements were mostly no longer aimed at making it easier to import from low-cost countries. The main goal was to improve trade rules for American companies doing business in other rich countries.
10. The offshoring revolution is mostly played out
If you were once an American company that had to run a customer service call center or do labor-intensive information technology work, you had no real choice but to hire a bunch of Americans to do it. The rise of cheap, instantaneous global telecommunications has changed that, so you can place jobs where costs are lowest.
In the first decade of the 2000s, American companies did so on a large scale, locating jobs in countries such as India and the Philippines. This is a slightly different version of the previous analogy of the farm; a customer service operator in Kansas was suddenly in competition with millions of low-income Indians for a job.
But it is not as if the internet can be invented a second time.
Do you realize a theme here? In the early years of the 21st century, a combination of globalization and technological advancement has put American workers in competition with billions of workers around the world.