The coming global labor market

Much as technological and economic change is integrating capital markets globally, it is also creating a single global market for jobs that can be undertaken remotely. Some people argue that nearly all such service jobs will eventually move from developed to low-wage economies; others counter that rising salaries in Bangalore and Prague show that supplies of cheap offshore professional talent are already running low. The McKinsey Global Institute analyzed the question by assessing not only the raw numbers of university graduates in China, India, and other parts of the developing world, but also their suitability and accessibility for employment by multinationals. MGI also examined the role that competition for this highly desirable labor force will play.

 
MGI's conclusions—that the global labor market is small but will increasingly affect wage rates and employment in the developing world, though it isn't likely to create sudden discontinuities in the developed one—are important whether you are an executive thinking about moving work to low-wage countries, a government official in such a country, or an employee in a developed economy that relies extensively on offshoring. Read all about "Sizing the emerging global labor market" (2005 Number 3).