Examine how technology and globalisation may affect wage rates in developed countries. Use an appropriate labour market diagram in your answer.

Technology and globalisation have significant impacts on wage rates in developed countries. Here's a step-by-step analysis:

1. Technology Advancement: Technological progress can lead to increased productivity. This means that each worker can produce more goods or services in the same amount of time. In a competitive labour market, this increase in productivity should lead to an increase in wages. This can be illustrated in a labour market diagram where the demand curve for labour shifts to the right, leading to higher wages and higher employment.

2. Skill-Biased Technological Change: However, not all workers benefit equally from technological progress. Technology tends to be skill-biased, meaning it raises the productivity (and therefore wages) of skilled workers more than unskilled workers. This can lead to increased wage inequality. In a labour market diagram, this would be shown by a steeper demand curve for skilled labour, leading to higher wages for skilled workers.

3. Globalisation: Globalisation allows firms to source labour from around the world. This increases the supply of labour, which can put downward pressure on wages, especially for unskilled workers in developed countries. In a labour market diagram, this would be shown by a shift to the right in the supply curve for labour, leading to lower wages.

4. Offshoring and Outsourcing: Globalisation also allows firms to offshore or outsource their production to countries where labour costs are lower. This can reduce the demand for unskilled workers in developed countries, leading to lower wages and higher unemployment. In a labour market diagram, this would be shown by a shift to the left in the demand curve for labour.

5. Increased Competition: Globalisation can also lead to increased competition, which can put downward pressure on prices and therefore wages. However, it can also lead to increased demand for skilled workers who can compete on a global scale, potentially increasing wage inequality.

In conclusion, technology and globalisation can have complex effects on wage rates in developed countries. While they can lead to higher productivity and potentially higher wages, they can also increase wage inequality and put downward pressure on wages for unskilled workers.