Economics focus: Be my guest

摘要

Labour is globalisation's missing link. The flow of workers across borders is heavily impeded, leaving the global market for labour far more distorted than those for capital and commodities. The world price of capital may be set in America, and that of oil set in Saudi Arabia. But there is no such thing as a world price of labour. Wages can differ by a factor of ten or more depending only on the passport of the wage-earner, according to Dani Rodrik, an economist at Harvard. Relaxing the movement of labour even a little would thus generate large efficiency gains. Mr Rodrik calculates that letting poor workers into rich countries, in modest numbers (equivalent to 3% of the hosts' labour force) for a limited period, could reap benefits to the developing world worth $200 billion a year. With numbers like that, he and other economists wonder why so much energy is spent freeing trade and capital, and so little expended freeing labour.