International Economics Commons^™

Trade And Wages: Choosing Among Alternative Explanations, Jagdish N. Bhagwati

Faculty Scholarship

The decline in unskilled workers’ real wages during the 1980s in the United States and the increase in their unemployment in Europe (due to the comparative inflexibility of European labor markets vis-à-vis those in the United States) have prompted a search for possible explanations. This search has become more acute with the evidence that the adverse trend for the unskilled has not been mitigated during the 1990s to date.

A favored explanation, indeed the haunting fear, of the unions and of many policymakers is that international trade is a principal source of the pressures that translate into wage decline and/or …