Around 1990, the emerging countries China, the former Soviet bloc and India joined the global economy. This event changed the entire global labour market at once because the whole world became a single economic market based on capitalism. The joining of the three countries increase the global labour pool suddenly from 1.46 to 2.93 billion workers and almost doubled. If at the same time the capital stock would have risen the effect would have raised the demand for workers at the same time. Because in the long run the capital stock depends on the rate of savings and the future capital formation.
Despite, this did not happen due to the effect that countries ratio capital to labour in economy fell to 61% due to the missing capital stock. India, China and the former Soviet bloc had little financial resources and therefore did not bring much capital with them. Based on this the global balance of power shifted to capital. This movement supplied the world labour market with low-wage labour. In advanced economy this shifted was seen threatening in different branches of the economy, especially in the low-cost area. Companies threatened their staff to move facilities to low-cost labour and try to maintain stable cost in their home countries. These practices mostly had success. In the long run the emerging economies are going to reach a high education and cost level as the advanced economies in nowadays.
One way to prevent advanced economies to slip of the edge is to obtain a good education system and to educate workers. Over the long run the emerging countries become more and more technological competitive. Nowadays we speak of the first truly global labour market due to the modern technology and business practices.
The overall prospects of the labour market in 2012 have worsened. The International Labour Organziation (ILO) calls it an urgent challenge due to the weaker global economy and the three years of world crisis. It states that worldwide an additional 600 million jobs have to be created in the next decade. The ILO statistics reveal that about 1.1 billion people are unemployed or live under poverty worldwide. The growth rate worldwide has declined, but growth rate in emerging economies, like Latin American countries and Asia grew slowly. Despite the efforts of the governments the job crisis continuous unabated with one out of three workers unemployed or living in poverty. Youth has been hit among the hardest.
University of Wisconsin–Madison Institute for Research on Poverty, the new global labour market