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The Pauper Labor Argument highlights the unfairness of international trade when competition is based on low wages. It suggests that countries with low labor costs can undermine domestic industries, impacting employment and wages. This argument gained traction during events such as NAFTA, which allowed Mexican industries to compete with U.S. industries due to lower wages. Critics argue that this can damage American jobs, while proponents highlight the necessity of global trade for economic growth. Understanding this argument is vital for analyzing the complexities of trade relations and economic policies.
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Misconceptions about comparative advantage 小组成员 卢佳炜 路君 张佳琪
The Pauper Labor Argument • What is Pauper Labor Argument? It is to point to in international trade, if it comes from foreign competition is built on the basis of low wages, then the competition is not fair, and can damage the interests of other countries to participate in the competition.
The Pauper Labor Argument Generally speaking, the production of low labor rate national salary relatively low, and high productivity is relatively high. Some people think that the domestic industry do not necessary to trade with the low efficiency low wages foreign industry, this view is very wide spread and has the quite big political influence.
The Pauper Labor Argument For example, In 1993, after Mexico much lower wages, between Mexico and the United States of American industry free trade can lead to south, will be like "absorb a large tone" that will attract the resources of the United States. The low wage rate and foreign country from trade to be whether the problem is not have too great relationship. Foreign production cost is low because the labor productivity high or low rate because the pay is a matter of no account, the key is to use their own labor to measure.
