Chapter 21: Problem 6

Do the jobs for workers in low-income countries that involve making products for export to high-income countries typically pay these workers more or less than their next-best alternative?

Short Answer

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Jobs for workers in low-income countries that involve making products for export to high-income countries typically pay more and offer better job stability than their next-best alternative, as they tend to have higher wages, better working conditions due to stricter regulations, and more consistent demand for the products. However, specific cases may vary depending on the industry, country, and other contextual factors.

Step by step solution

Understand the job scenarios

First, let's identify the two job scenarios we're comparing: 1. Jobs that involve making products for export to high-income countries. 2. Workers' next-best alternative jobs, which could be working for domestic companies or in the informal sector. #Step 2: Compare wages in both scenarios#

Compare wages

Next, compare the wages offered by jobs in both scenarios. In general, jobs that involve exports to high-income countries may offer higher wages compared to the next-best alternative, as these companies tend to be more competitive and may need to pay higher wages to attract workers. #Step 3: Consider working conditions#

Evaluate working conditions

Apart from wages, working conditions are another important aspect to consider. Export-oriented jobs may provide better working conditions as they are often subject to stricter regulations or guidelines imposed by high-income countries or international organizations. This may not be the case for the next-best alternatives, where workers may face poorer working conditions, especially in the informal sector. #Step 4: Analyze job opportunities and stability#

Analyze job opportunities and stability

Lastly, consider the job opportunities and stability in both scenarios. Export-oriented jobs might offer more stable work due to a more consistent demand for the products, while next-best alternatives may be more susceptible to fluctuations in the local economy, resulting in unstable work opportunities. #Step 5: Determine the overall outcome#

Determine the overall outcome

Taking into account wages, working conditions, and job opportunities, it's generally found that jobs for workers in low-income countries that involve making products for export to high-income countries typically pay these workers more and offer better job stability than their next-best alternative. However, it is important to consider that specific cases may vary depending on the industry, country, and other contextual factors.