In the U.S.labor is relatively scarce (particularly low-wage labor) and capital is relatively abundant.In poorer countries,labor is relatively abundant (particularly low-wage labor) and capital is relatively scarce.Integrating markets with poorer nations thus results in lower wages for U.S.workers and increased returns to U.S.capital holders.(We should note in passing that many American workers also own capital.) So in the U.S.,globalization means that the value of the stock market increases while wages stagnate or decrease.
But this describes only the effect of globalization in our nation.In countries with an abundance of labor relative to capital03which is the case in most poor countries03the opposite outcome occurs:Globalization means that wages increase,and can increase significantly.This is what the U.N.report describes.(The other outcome would be stagnation or decline in returns to domestic capital in poorer nations.This provides a potential reason for opposition to globalizationamong economic elites in less-developed countries.)
Put the two predicted effects together for labor,and we get the seeming paradox ofthe middle class rising throughout most of the less-developed world,while the middle class stagnates or declines in the U.S.