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Moreover, the costs of saving jobs through protectionism can be very high. A number of different studies have attempted to estimate the cost to consumers in higher prices per job saved through protectionism. [link] shows a sample of results, compiled by economists at the Federal Reserve Bank of Dallas. Saving a job through protectionism typically costs much more than the actual worker’s salary. For example, a study published in 2002 compiled evidence that using protectionism to save an average job in the textile and apparel industry would cost $199,000 per job saved. In other words, those workers could have been paid $100,000 per year to be unemployed and the cost would only be half of what it is to keep them working in the textile and apparel industry. This result is not unique to textiles and apparel.

(Source: Federal Reserve Bank of Dallas)
Cost to u.s. consumers of saving a job through protectionism
Industry Protected with Import Tariffs or Quotas Annual Cost per Job Saved
Sugar $826,000
Polyethylene resins $812,000
Dairy products $685,000
Frozen concentrated orange juice $635,000
Ball bearings $603,000
Machine tools $479,000
Women’s handbags $263,000
Glassware $247,000
Apparel and textiles $199,000
Rubber footwear $168,000
Women’s nonathletic footwear $139,000

Why does it cost so much to save jobs through protectionism? The basic reason is that not all of the extra money paid by consumers because of tariffs or quotas goes to save jobs. For example, if tariffs are imposed on steel imports so that buyers of steel pay a higher price, U.S. steel companies earn greater profits, buy more equipment, pay bigger bonuses to managers, give pay raises to existing employees—and also avoid firing some additional workers. Only part of the higher price of protected steel goes toward saving jobs. Also, when an industry is protected, the economy as a whole loses the benefits of playing to its comparative advantage—in other words, producing what it is best at. So, part of the higher price that consumers pay for protected goods is lost economic efficiency, which can be measured as another deadweight loss, like that discussed in Labor and Financial Markets .

There’s a bumper sticker that speaks to the threat some U.S. workers feel from imported products: “Buy American—Save U.S. Jobs.” If the car were being driven by an economist, the sticker might declare: “Block Imports—Save Jobs for Some Americans, Lose Jobs for Other Americans, and Also Pay High Prices.”

Trade and wages

Even if trade does not reduce the number of jobs, it could affect wages. Here, it is important to separate issues about the average level of wages from issues about whether the wages of certain workers may be helped or hurt by trade.

Because trade raises the amount that an economy can produce by letting firms and workers play to their comparative advantage, trade will also cause the average level of wages in an economy to rise. Workers who can produce more will be more desirable to employers, which will shift the demand for their labor out to the right, and increase wages in the labor market. By contrast, barriers to trade will reduce the average level of wages in an economy.

Questions & Answers

The convenient notion of utility
Sana Reply
Definition of accounting
Buhari Reply
when there is a surplus of a product in an unregulated market there is a tendency for proce to rise or price to fall or quantity demand to increase or quantity supplied to increase
Karen Reply
what is oligopoly?
Nurina Reply
oligopoly is a small industry were there are few firms(not more than ten firms) each firms are likely to be aware of the action of the other firms
what is difference macro economy and microeconomic
Chhaya Reply
macro means large and micro means small in macro economics we study about whole economy and in micro economics we study about individuals like individual consumer
thank you
Please explain me the concept of elasticity.
what is Is corve
In simple terms, elasticity is defined as the responsiveness of one variable to another. That is, how a change in one variable affects other variables. With that in mind, price elasticity of demand measures how a change in the price of a given product affects its demand
elasticity shows how much one variable change due to change in another variable
acha what is valuable demand
where from u wani ruhee
what is the difference between disequilibrium in balance of payment and balance of trade?please.
what is Is curve
what is utility
Waseem wani from ANANTNAG district
utility means want satisfying power of a good
what is different economic growth and development
Chhaya Reply
It's simple growth is an quantitative concept and development is an quantitative concept. Example: Economic growth of particular country (GDP, Percapita Income) Development of that country( Literacy level, Human development and all).
In other words, you age is growth, it can be measure. How much skills and knowledge that your having this is Development, It cannot be measure.
In that first reply it's just typing mistake I am sorry, Development is an qualitative concept.
your welcome.!
right PM
Hearty thank you sir.,
Hi, Economist., Greetings of the day., This is Paramasivam P., PhD Research Scholar of Economics from India
Paramasivam Reply
Yah thanks to everyone., Greetings of the day.!
hi sir..
Your contents are very helpful
explain economic growth
STK Reply
what causes demand pull inflation
what causes demand pull inflation?
It starts with an increase in consumer demand
economic growth is the stability of money - when there is stability people will help the economy grow
What is scarcity
frank Reply
What cause demand pull inflation
Randy Reply
what is meaning of scarcity in urdu
Aarif Reply
scarcity means that there is limited resources but unlimited wants.
What is sunks cost
cost that have already incurred by a firm and cannot be recovered in a future.
cost taht cannor be avoided bcz they have already incurred
is this in urdu books on mbl of am economice
Arham Reply
it is the total quantity of goods a consumer is willing and able to buy at a particular time. with respect to price
Jeremiah Reply
what is demand
Mohammed Reply
demand is  willingness to pay a price for a specific good or service.
difference between change in demand and quantity demanded
Respicious Reply
Change in demand is as a result of increase In price or decrease in price of commodities at a particular time. Quantity demanded is defined as total quantity of goods a consumer is willing and able buy at a given price and at a particular time.

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Source:  OpenStax, Microeconomics. OpenStax CNX. Aug 03, 2014 Download for free at http://legacy.cnx.org/content/col11627/1.10
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