contestada

If Country I has an industrialized economy and Country II is a developing country, which group of workers would suffer the GREATEST loss if the two countries entered into a free trade agreement?

A Highly skilled workers in Country I would suffer the greatest loss due to outsourcing of their jobs to Country II.

B Highly skilled workers in Country II would suffer the greatest loss due to outsourcing of their jobs to Country I.

C Unskilled workers in Country I would suffer the greatest loss due to increased competition from unskilled workers in Country II.

D Unskilled workers in Country II would suffer the greatest loss due to increased competition from unskilled workers in Country I.

Respuesta :

Unskilled workers in Country I would suffer the greatest loss due to increased competition from unskilled workers in Country II.

Explanation:

Country I is an industrialized country, thus a developed country. That means that the country's labor force, in general, is highly skilled. There are unskilled workers as well though, and they occupy the working positions that don't require any specific skills. The wages in a country like this would be relatively high, and when compared to a developing country, it is very probable that the unskilled workers from the industrialized country earn more than the skilled workers of the developing country.

If the the Country I and Country II open up to each other, especially in economic manner, there will be lot of positives, but also some negatives. The main negative would be that the unskilled workers from country one will most probably lose their jobs. The reason for that will that the unskilled workers from Country II are able to perform the same job, but they require much smaller wages, so naturally the business owners would prefer to hire them.

There are many examples like this around the world, with some being:

  • Eastern Europeans in Western Europe
  • Mexicans in the United States
  • Venezuelans in Colombia
  • Central Asians in Russia

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