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.

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