Engineers under attack: How globalisation is hitting professionals

New research by a team of academics led by economics professor Sergi Basco from the University of Barcelona has revealed that the impact of globalisation on workers depends not only on the sector, but also on the specific occupation.

Skilled professionals such as engineers and technicians, as well as low-wage workers in highly regulated industries,were particularly vulnerable.

In a study covering data from more than 163,000 private sector workers in France between 1993 and 2015, researchers analysed the impact of the so-called "China shock" - the rapid growth of Chinese imports, which increased international competition and put pressure on workers' earnings.

The first study, published in the Journal of International Economics, introduces a special index of occupational exposure to globalisation. It shows how different professions suffer from competition with Chinese imports.

It turns out that technical specialists (e.g. engineers) are losing the most because their skills are difficult to apply in other fields. At the same time, employees with more versatile tasks - for example, office workers - are less vulnerable to such shocks.

The authors emphasise that the income losses caused by occupation are comparable to those previously attributed to belonging to a particular sector. This calls into question simple approaches to analysing the impact of globalisation based on education level or industry type alone.

The second study, published in Economics Letters, focuses on the role of collective bargaining.

The researchers found that in some cases such agreements do not mitigate, but even exacerbate, the negative impact of globalisation on wages. Low-paid workers in highly regulated sectors are particularly hard hit, with wages falling more sharply than in less regulated sectors.

For highly skilled workers, the difference between regulated and unregulated sectors virtually disappears. And the decline in income is not only through direct cuts in wages, but also through a reduction in the number of working hours.

Nevertheless, the researchers emphasise that they are not criticising collective bargaining as such - their aim is to show the need to rethink it in today's realities.

Although the research is based on data from France, the findings are also relevant to Spain, where the structure of the labour market is similar. They also help to understand the potential implications for other countries - for example, in the US, where duties and restrictions on foreign trade are being discussed.

According to Prof Basco, falling exports have a similar effect as rising imports.