During the same period that robots and other new technologies have been affecting the labor market, there has been an increase in imports to the United States of manufactured goods-including shoes, clothing, and automobilesfrom countries in which workers receive lower wages. \(\operatorname{In}\) addition, some U.S. firms have engaged in "offshoring," in which they move some operations - such as telephone help lines - to other countries where wages are lower. a. Are the workers most likely to lose their jobs to robots also likely to be affected by these developments? Briefly explain. b. By looking at changes in equilibrium wages in the affected industries, can we distinguish the effects of increased use of robots, increased foreign imports, and increased offshoring? Briefly explain.

Step by step solution

01

Identify the workers most likely to be affected

Workers most likely to lose their jobs to robots are those in industries where processes can be automated, such as manufacturing. These are also the same workers that might be influenced by increased import of manufactured goods and offshoring. Firms tend to offshore production to countries where labor is cheaper, affecting domestic jobs in the same sectors. Therefore, workers in manufacturing sectors are the most likely to be affected.

02

Analyzers changes in equilibrium wages

Equilibrium wages in affected industries are influenced by a variety of factors including technological advances, foreign imports, and offshoring. For example, when tasks are automated or offshored, demand for certain types of labor decreases, leading to a decrease in wages. Increased foreign imports can also lead to more competition and potentially lower wages. However, it's challenging to independently verify the effects of each factor as they tend to coexist and simultaneously influence wages.

03

Conclude the analysis

While it is clear that jobs in certain industries are susceptible to changes from automation, increased imports and offshoring, it is challenging to isolate the influences of these individual variables on wages. The labor market and wage determinants are influenced by a myriad of geopolitical, economic and technological factors, which make it difficult to distill the unique effects of each variable.

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