The growth of international trade between countries with sharply different levels of income has once again raised two significant traditional concerns: that firms in rich countries cannot successfully compete in trade with low-wage countries, and that the resulting loss of production and jobs will depress output and living standards in high-wage countries unless barriers to trade are maintained or strengthened.
Stephen S. Golub examines the evidence about the likely effects of liberal trade policies. His data demonstrate that the costs of producing goods are not nearly as different across countries as differences in wage rates alone would suggest, once productivity differences are taken into account. Golub also shows that trade leads not to a net loss of jobs in high-wage countries but to changes in the composition of jobs. He argues that fears about the ability of high-wage countries to compete are greatly exaggerated, and that international trade helps to raise living standards in both rich and poor countries.
Labor Costs and International Trade is one of a series of new AEI studies on trends in the level and distribution of U.S. wages, income, wealth, consumption, and other measures of material welfare. A list of publications in this series appears inside.
In his new book, Real Education: Four Simple Truths for Bringing America's Schools Back to Reality, AEI's Charles Murray focuses on four simple, hard truths that are rarely discussed or even acknowledged by educators and politicians.
In this provocative new book, Arthur C. Brooks explodes the myths about happiness in America. He examines vast amounts of evidence and empirical research to uncover the truth about who is happy in America, who is not, and why.
