Essay about Foreign Workers, Low Wages
The main reason companies shift work to lower wage countries is to reduce operating costs. Low labour, production, and energy costs in countries such as China, Japan, India, and Mexico is causing companies to shut their factories within the United States and open new factories in those foreign countries. This leads to the loss of jobs within the United States, a lower standard of quality, and resentment by those who are living within the United seeing more and more of their jobs going overseas. In 1994, NAFTA (North American Free Trade Agreement) was passed by then President Bill Clinton. His goal was to open the trade routes to …show more content…
1. Other factors – like minimum wage laws which leads to higher prices for relatively abundant labour - therefore making it cheaper to import rather than export.
2. Leontiff paradox – The United States makes export more labour intensive, this is due to the high tech products with high labour quality input rather than man hours of work e.g. level of education will also affect a country's advantage rather than its scarcity or abundance. The prospect of losing millions of jobs to low-wage countries is not just an issue in Europe. In the United States, Congress and presidential candidates have diverted their rage at China sucking away US