Initially, China is likely to specialise mainly in relatively low-skilled labour-intensive manufacturing, whereas developed economies will concentrate on activities needing higher skills.
The recent uptick in earnings at the bottom is a blip in an otherwise long downward trend in the market for low-skilled labour.
The first stage in the cycle is that of factor-driven economies which focus on low-cost basic factor conditions, such as low-skilled labour, natural resources and geographic location.
Even before the recession, which will wreak lasting havoc on their earning power and trust in government, the market had ceased rewarding diligent, low-skilled labour with reasonable pay and benefits.
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Mind you big box stores are still labour intensive, the only difference is, instead of a lot of people owning and running their own stores one entity owns and runs the place with low-skilled labour from the pool of people who have been run out of business.
Governments fret that stronger currencies would make exports less competitive, but they would also encourage firms to shift upmarket from low-skilled to higher-skilled labour, which is essential for long-term prosperity.
Developed economies have lots of skilled workers, whereas emerging economies have lots of low-skilled ones, so according to the theory advanced countries will specialise in capital-intensive products requiring skilled labour and emerging economies in low-tech products.
It remains highly fragmented, under-capitalised, labour intensive and predominantly low-skilled: not the ideal position to be in as the business heads south.
Better incentives might encourage low-skilled men to return to the labour market.
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Ever more low-skilled white American men have left the labour force, many moving onto disability rolls.
More recently, and more sensibly, Sweden has cut taxes on labour, especially for the low-skilled.
They suggest how the low-skilled workers left behind might be helped by further reforms in the labour market as well as by better education and training.
China still has perhaps 200m underemployed rural workers who could move to factories over the next two decades, so wages for low-skilled workers are rising more slowly than productivity, reducing China's unit labour costs.
In seasonal work and construction, cheap foreign labour can depress wages and make it harder for the low-skilled to find work, but the flexibility and willingness of new workers can also boost productivity and encourage innovation.
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