headed to Israel—one of the biggest immigration shocks a country has ever seen. It is hard to find pressure on Israeli wages caused by all these Russians. They were absorbed by firms hiring them in industries such as IT on one end of the distribution and construction on the other; the Russians needed places to live.

Trade is another important globalizing influence. Even if borders are closed and immigration is not allowed, the labor markets can become integrated as goods and services flow across borders. For instance, textile production has declined in the United States, and this has had a lot to do with import competition.

Trade will affect the prices that activities fetch on world markets. As international markets become more integrated, prices that firms can charge in different countries can change, and this will have a direct impact on wages. A growing body of evidence in international business shows that trading goods and services is an important way for capital and technology to flow among countries.

Especially in the United States, the term “trade” often leads to a discussion of numbers of jobs. Those who do not like fair trade argue that international trade destroys jobs. Those who like international trade argue that international trade creates jobs. Both arguments are both right and wrong. International trade does not destroy jobs or create jobs. If we take a long-perspective (decades) look at living standards, the issue has more to do with the number of jobs in the economy rather than the kinds of jobs. Only through the simultaneous destruction of some jobs and the creation of other jobs can international trade on the average, benefit economies along the lines that economists are so fond of talking about.

From the economist’s point of view, international trade is on average a good thing for countries. The gains that economists talk about—a firm specializing along the lines of competitive advantage and consumers having wider choice—come about only when firms get out of some lines of business in a country. From the standpoint of the welfare of the United States it may be a good thing that firms in textiles and apparel and footwear shut down. It is only by releasing the people, capital, and technology that are in those industries and allowing them to move into industries such as chemicals, IT, and aircraft—industries in which the country is better than the rest of the world—that the gains economists talk about are accomplished. Overall, international trade both destroys jobs and creates jobs, and it is hard to find any evidence that it has any net impact.

However, the impact of international trade on labor markets is not uniform. Trade globalization tends to be good for countries on the average, but “on the average” is an important phrase. When countries, on the average, gain from trade, not every person, firm, or geographic region benefits

from the liberalization. There can be sharp distributional impacts of trade liberalization that underlie much of the political tension in the United States and many other countries about trade liberalization. It is not that people do not acknowledge the aggregate gains, but they worry about the distributional impacts and how individual workers will benefit.

The U.S. economy has become much more integrated in the global economy as seen by changes in the flow of trade with other countries. Figure 1.2 shows the import and export share of the gross domestic product (GDP) from the late 1950s to 2000. Imports and exports have gone up over time and, since 1978, imports have exceeded exports as a share of GDP. In the immediate post-World War II period, the United States was basically a closed economy with respect to international trade. Virtually all of the materials that were produced by firms in this country were sold to people in this country. Today, that is much less the case.

Labor markets become more global through foreign direct investment (FDI), which occurs when multinational firms set up, expand, and contract operations around the world. Multinational firms and the capital-allocation decisions they make can be important in terms of determining the number of people who choose to be in the labor force. Multinational firms may choose to have expatriates work in other countries. They may also take advantage of particular visa programs, such as H-1B and L1 (intra-company transferees) in the United States, to reallocate labor in their firms across borders.

Multinational firms can be big forces toward greater competitiveness in product markets. Many studies show that,

Front Matter (R1-R12)

Introduction and Summary (1-4)

Context and Overview1 How Do National Labor Forces Become Global, and Who Should Care? (5-16)

The Industrial Perspective2 Major Trends Shaping the Future Workplace (17-24)

3 Boundary-Crossing Technology Networks at Degussa (25-29)

4 Evolving Opportunities Building a Global, Technical Workforce (30-36)

The Academic Perspective5 Does the U.S. Style of Chemical Engineering Education Serve the Nation Well? (37-44)

6 The Itinerant Chemist Where Will the Jobs Be in 2020? (45-52)

7 Attracting and Preparing Chemists and Chemical Engineers for a Global Workforce (53-56)

The International Perspective8 Seeing the World Through a Different Window (57-64)

9 Expanding Boundaries to Advance Medical Research Lessons Learned at the National Institutes of Health and Ways Forward (65-72)

Appendix A: Workshop Participants (73-74)

Appendix B: Biographical Sketches of Workshop Speakers (75-76)

Appendix C: Origin of and Information on the Chemical Sciences Roundtable (77-78)