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Chapter 34: Q.5 (page 831)

How does international trade affect working conditions of low-income countries.

Short Answer

Expert verified

The wage level of the workers in exporting industries might increase

Step by step solution

01

Step 1. Introduction 

International trade refers to the exchange of goods, services, and resources across international borders. In international trade, both the participants can be benefited from trade.

02

Step 2. Explanation

International trade can help in increasing production through a rise in exports. This would contribute to increased jobs and higher wages in exporting industries. As a result, the worker in industries producing for exports may enjoy the benefits of higher wages. Improved wages might be accompanied by improved working conditions.

However, some industries that have to face competition from foreign industries can be harmed by trade. If they are not able to compete with imported products, they can face job reductions and lower wages. Workers in such industries are harmed because of international trade.

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