Question

Recently, computer programmers in developing countries such as India have begun doing work formerly done in the United States. This shift has undoubtedly led to substantial pay cuts for some programmers in the United States. Answer the following two questions:______
A) How is this possible, when the wages of skilled labor are rising in the United States as a whole?
B) What argument would trade economists make against seeing these wage cuts as a reason to block outsourcing of computer programming?

Answer 1

Answer:

The answer is shown below:

Explanation:

A.

In the span which is short​ run, programmers with particular skills that compete with the Indian workers face the wage​ cuts, whereas, in the span which is long​ run, programming becomes more​ efficient, which could lead to  increase in wages for others in the industry.

B.

The arguments which trade economist could make against:

1. Possible for those who gain from outsourcing in order to compensate those with who lose.

2. Allowing the programming to be done more cheaply which expands the possibilities of production frontier of the​ US and making the entire country in a situation to better off on average.

3. The effects of the income distribution from outsourcing are not particular to the international trade.