There are other factors at playby Stijn Hoorens / December 20, 2016 / Leave a comment
Brexit, Donald Trump, Marine Le Pen, Alternative für Deutschland, politician Geert Wilders in the Netherlands. All channel rising anti-establishment sentiment that has been attributed to a predominantly white, low-skilled contingent—one that has lost out in the age of globalisation.
Indeed, recent analyses of electoral results from the EU referendum and the US presidential election suggest that there is a strong correlation between areas with lots of “Leave” voters, and Trump voters in the US, and areas with a high density of low-skilled workers. Research has shown that some regions in the UK, such as the midlands and north east, which have been more exposed to recent rises in manufacturing imports from China have more “Leave” voters. Comparable regions elsewhere include America’s rust belt, and the north of France, where a significant number of manufacturing jobs have disappeared.
But if these groups feel squeezed, is globalisation really to blame?
It might be one of many drivers. But a return to protectionism, through ending trade agreements and throwing up trade barriers, is unlikely to help. In fact, a variety of other factors may exacerbate inequality over the next years, such as skills, age and household type.
Technology may drive productivity gains, boost demand and, as such, have a positive effect on employment. However, low- and medium-skilled workers are more susceptible to being replaced by technologies than high-skilled workers are. As a consequence, unemployment for low-skilled occupations is expected to rise in the long-term. Moreover, earnings gained from productivity growth related to technology are heavily concentrated among high-income workers and families.
Young people (from ages 15 to 24) are also heavily affected by inequality. They were the only age group in…