Growing labour pains beset global economy

Greater effort is needed to improve access to education and health care in the developing world as technological advances displace traditional labour forces, writes Kaushik Basu.

The ongoing global economic slowdown, which began in 2008 with the financial crisis in the US, could set a new endurance record. What is certain is that with growth stalling in Japan and slowing in China, and with Russia in deep crisis and the eurozone still barely recovering, the world economy is not yet out of the woods.

This “persistent recession”, as well as some of the world’s political conflicts, are manifestations of a deeper shift in the global economy — a shift driven by two kinds of innovations: labour-saving and labour-linking.