Trade Issues | |
Trade and Wage Gaps |
Trade may widen the gap between wages paid to the more highly-educated
and those with fewer skills and less education, say some economists. However,
imports lower consumer prices -- benefiting the very U.S. workers who might
be somewhat disadvantaged by competition from foreign labor. Since 1973, the wage gap between skilled and unskilled American workers
has widened.
Imports from developing countries are growing rapidly; but imports are
only 5 percent of the economy; thus they can not cause large, economy-wide
shifts in income. In a new study, Institute of International Finance economist William
Cline argues that technological change is the chief factor in the apparent
increase in the income gap between educated and low-skilled workers -- followed
by trade and immigration.
The key, most economists agree, is not protectionist policy, but education
-- which boosts wages for everyone through greater productivity. Source: Bob Davis, "At the Heart of the Trade Debate: Inequity,"
Wall Street Journal, October 31, 1997.
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