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Protecting Domestic Jobs Through Trade Policy

Protectionism aims to protect domestic jobs from foreign competition by using policies like tariffs and subsidies. Supporters argue this prevents layoffs and unemployment. However, protectionism also reduces economic growth in the long run by misallocating resources and making industries less efficient. While protectionism may maintain employment levels in the short term, it ultimately decreases an economy's ability to generate new jobs in the future.

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59 views2 pages

Protecting Domestic Jobs Through Trade Policy

Protectionism aims to protect domestic jobs from foreign competition by using policies like tariffs and subsidies. Supporters argue this prevents layoffs and unemployment. However, protectionism also reduces economic growth in the long run by misallocating resources and making industries less efficient. While protectionism may maintain employment levels in the short term, it ultimately decreases an economy's ability to generate new jobs in the future.

Uploaded by

Yien Ling
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

2.2 Protect Domestic Jobs Protect domestic jobs is one of the leading arguments for protectionism (Hall, 1999).

The domestic jobs should be protected because it could reduce the unemployment rate. The foreign import gives competition with the domestic production (AmosWEB, 2000). This will result in more and more people to be unemployed. The domestic consumers purchase the imports rather than the domestic production whereas the domestic production will be declines and it will happens same with the domestic employment (AmosWEB, 2000). This is because the workers needed to face the unemployment and the lower wages (AmosWEB, 2000). Apart from that, the labour unions and domestic industries often appeal to the patriotism to marshal support for the protectionist policies (Hall, 1999). For instance, if the domestic industry such as the steel industry in United States is forced to compete against a foreign country that produces the steel cheaper (Spruiell, 1996). This causes the domestic industry has to lay off hundreds or thousands of the local workers in order to stay competitive (Spruiell, 1996). The protectionist policies such as the subsidies and high tariffs which given by government could save the jobs in the domestic industries (Spruiell, 1996). In this case, the domestic workers would not worries about they will lost the jobs. The supporters of the protectionism note that the policy will raise the government revenue through the increased of the tariff charges and American companies would hesitate to move abroad because the higher import taxes would be charged to sell their goods in the United States (Clarke-Brown, 1999). The protectionism argues that the defense technology cannot be awarded on the basis of free trade on the question of the national security technology (ClarkeBrown, 1999). The quotas on the imports which under the protectionism would serve the domestic marketplace (Clarke-Brown, 1999). Import barriers deplete the supplies from the foreign market while it allows the domestic market to raise the price of the import product (Clarke-Brown, 1999). Although the protection exists to protect the local industries from closing down, preventing a rise in unemployment and reductions in the protection have the ability to promote the higher rates of the employment for the domestic economy in the long run (Joeydaprof, 1999). This is because the protection diverts the resources away from the more efficient firms and creating a misallocation of the resources will reduce the level of the economic growth possible (Joeydaprof, 1999). The economic growth would have otherwise had the generated jobs (Joeydaprof, 1999). The continued protection will in the long run reduce the rate at which the

jobs are created (Joeydaprof, 1999). By implementing protection, the domestic economies will maintain the employment levels in the short run but has the implication of decreasing an economys ability to create the employment in the future (Joeydaprof, 1999).

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