Pauper labor argument

The pauper labor argument is a political argument in international trade which claims that foreign competition based on low wages harms the domestic economy. The pauper labor argument is usually used by employee organizations such as labor unions to promote protectionist trade policies restricting imports from abroad. Economic theory, however, states that it does not matter whether a foreign country's advantage in producing goods at low cost is due to high productivity or low wages. Instead, the domestic economy should specialize on the production of the goods for which it has a comparative advantage (and not necessarily an absolute advantage) and trade these efficiently produced goods against the goods for which foreign countries have comparative advantages. This approach is seen as consi

Pauper labor argument

The pauper labor argument is a political argument in international trade which claims that foreign competition based on low wages harms the domestic economy. The pauper labor argument is usually used by employee organizations such as labor unions to promote protectionist trade policies restricting imports from abroad. Economic theory, however, states that it does not matter whether a foreign country's advantage in producing goods at low cost is due to high productivity or low wages. Instead, the domestic economy should specialize on the production of the goods for which it has a comparative advantage (and not necessarily an absolute advantage) and trade these efficiently produced goods against the goods for which foreign countries have comparative advantages. This approach is seen as consi