International economics Assignment Example | Topics and Well Written Essays - 500 words

International economics - Assignment Example These fears that caused by the emergence of globalization mainly focused on jobs that might be lost due to the competition from foreign countries. The main threat was on wages and not on jobs as many analyst thought. Trade had little impact on the total number of employment in most of the developed countries. The other thing that trade had minimal effect on was the composition of the level of employment. Given that the labor markets are always flexible, the loss of jobs in one field should be to create other new jobs in another field. Therefore both the relative and the average wages stand a chance of being impacted by trade, this is due to the emergence of economies. For a very long time, real wage has been traced back to the average productive growth. This has however changed in modern times, the real pay of workers in many developed countries has slowly increased than labor productivity. For instance, the real wages that an employee gets in a week in the United States of America has fallen in the middle of income distribution by at least 4% in 2001 alone. During this period, the level of labor productivity has risen by 15%; this is based on real terms. In other economies such as that of Germany and Japan the income distribution is either flat or maybe falling. This has fueled an argument in favor of globalization that is aimed at making the workers to get better wages, it has also improved the security of jobs of the low-skilled workers hence the job loss is reduced. According to the ideas from David Ricardo, he argues that many economies tend to gain from trade through specializing in products that has the capability of comparative advantage. Looking at the economies of many developed countries, there is existence of many skilled workers but that is not the case in countries that are experiencing the emergence of economy since they have low skilled workers. The economist argues that the real wage in the United States of America