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Originally Posted by tamperpr00f
Ok thanks for answering but...
1. You are assuming that when companies employ "cheap" labor they will pass the savings on to the customer by reducing the price of their product. Has this been shown to be true.
2. Also what good does cheaper goods do U.S. citizens if they are unemployed, or underemployed? Which is what happens when companies hire "cheap" labor from other nations.
Please bear with me I am not trying to argue I honestly am uninformed on both sides of the arguement. If there is merit to NAFTA and other "free trade" ideas I would like to know.
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Even in the case of a monopolist, economic theory tells us that prices will go down as costs decline. Since an oligopoly is the existing framework it is safe to say that cost reductions have occurred as a result of trade policy.
At the same time better because of better economics theory and increased firm concentration there have been improvements in the ability for firms to price discriminate. Those who are able to self-select in the lower prices have seen a large reduction in their costs while those who have not tend not to see substantial savings.
To your second point many of the jobs that have been outsourced have low value added. America had, and to some extent still has, the opportunity to transform the economy into high value added one.