Falling barriers to international trade destroy manufacturing jobs in wealthy advanced economies. Discuss this statement. Do you agree? Why or why not?
What will be an ideal response?
Ans: Falling trade barriers allow firms to move manufacturing activities away from the United States and Western Europe and towards countries with lower wage rates. The pool of global labor has increased more than fivefold between 1900 and today. An example the text gives in about a U.S clothing manufacturer that was paying workers $9 and hour then closed operations and moved to Honduras where they could pay workers 48 cents an hour. However, some say free trade results in specialization of production and although there is dislocation of jobs, "the whole economy is better off." It is also stated that the economic growth in these developed nations has raised their standard of living and offset the fall in the share of national income.
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What will be an ideal response?
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