25%20International%20Trade%20and%20Labor%20Standards -...

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1 1 Trade and Labor Standards • Globalization and Low-Wage Labor • Trade Agreements and Labor Standards • Trade and Cultural Identity • The WTO and National Independence 2 • The rise of manufactured exports from developing countries is one of the major shifts in the world economy over the last 25 years. • Workers who produce manufactured goods for exports in developing countries are paid very little by advanced-country standards . http://www.nytimes.com/packages/html/nyregion/20071126_MANHOLES_FEATURE/index.html 3 • Critics of expanding international trade argue that the very low wages are evidence that globalization is not helping workers in developing countries. 4 • Should low wages be a cause for concern? – The standard analysis of comparative advantage suggests that trade is mutually beneficial to the countries that engage in it. – Moreover, when labor-abundant countries export labor-intensive manufactured goods, their national income should rise and the distribution of income should shift in favor of labor.
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2 5 Critics of globalization see this outcome and conclude that trade works against the interest of workers for 2 reasons: 1. Highly paid jobs in developed countries in low- tech, labor-intensive industries in the developed countries are lost to much lower paid workers in developing countries. 6
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This note was uploaded on 02/09/2011 for the course ECON 181 taught by Professor Kasa during the Fall '07 term at University of California, Berkeley.

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25%20International%20Trade%20and%20Labor%20Standards -...

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