The new global labor market

Before the collapse of Soviet Communism, China’s movement toward market capitalism, and India’s decision to undertake market reforms and enter the global trading system, the global economy encompassed roughly half of the world’s population comprising the advanced Organisation for Economic Co-operation and Development (OECD) countries, Latin America and the Caribbean, Africa, and some parts of Asia. Workers in the United States and other higher-income countries and in market-oriented developing countries such as Mexico did not face competition from low-wage Chinese or Indian workers or from workers in the Soviet empire. Then, almost all at once in the 1990s, China, India, and the former Soviet bloc joined the global economy, and the entire world came together into a single economic world based on capitalism and markets.