Question

In theory, protectionist policies will prevent some imports that might injure workers in several different ways: fewer jobs, lower wages, or poor working conditions. How might protectionist policies in reality cause these injuries rather than prevent them?

Answer 1

Answer and Explanation:

Protectionist policies followed by the government will lead to lack of competition for domestic firms in the market. When there is lack of competition for domestic firms in the market, this will make the firms inefficient in the long run in the country which has imposed protectionist policies. When the firms become inefficient, there will be less job creation in the jobs market and demand for labor will also reduce because of fall in profits of the firm. When profits fall, the firms will not be interested in providing safe working conditions to its employees because it will increase their cost of production reducing profits further. Thus, protectionist policies can lead to fewer jobs, lower wages or poor working conditions for the firm.