Question

The graph below shows the number of people employed in the textile and apparel industry in the United States from 1950 to 2002:

Answer 1

The correct answer is: "Textile manufacturers moved jobs to countries with lower labor costs".

One of the business practices that has emerged in the current  globalization scenario is the outsourcing. Firms decide to transfer their manufacturing facilities to developing countries where factors of production are cheaper: labor, raw materials. Those are also countries with more permissive laws, regarding the establishment of new businesses.

With this practice, firms have been able to greatly reduce their costs of production, if compared to producing the same good in a developed country, such as the US and hence, they have become more efficient and competitive in the international markets. In the US, the tendency has consisted on transfering the manufacturing activities abroad, with the corresponding reduction in the number of domestic workers employed in those sectors.  This is one of the main causes of the sharp decline in employment figures in the textile industries observed in the graph.

Answer 2

Answer:

The correct answer is: "Textile manufacturers moved jobs to countries with lower labor costs".