Wage Gap Between China an Us - 1246 Words

The wage gap between US and China The importance of international trade increased dramatically for the US as well as China. The ratio of the sum of exports and imports to GDP approximately doubled from the early 1970s to the mid 2000s for the US. And there is a striking feature that China was involved in about 7% percent of world trade by the mid-2000s. There is no doubt that the international trade have influenced the wage level around the world. Do wages equalize between US and China? It is the most remarkable conclusion of the Heckscher-Olin theory that trade can equalize the price of each factor of production across countries. Nevertheless, the long-term effect didn’t complete in the real world, especially in China. On majoy†¦show more content†¦Since it is less developed, we are rarely seeing what the labor union take measures today. While before it took more responsibility to deliver the Party’s policy to labors. In another aspect, all of the companies are aimed at the maximium profit, trying their best to cut costs and reduce wages. The companies are more powerful in the labor market, so the wage is decided mainly by them. In conclusion, because of the relationship in demand and supply in Chinese market, the labors’ competency, the labor union’s situation and the purpose for the company, Chinese labor has been undervalued. And this is a reason for the generation of Chinese and American wage gap. D. Technological Progress Also as we get the conclusion from the case in our book, technological progress plays an important role in increasing the wage gap between Chinese labors and American labors. The first aspect is that with the development of technology the cost and prices of some skill-intensive products decline, and the quality of these products is improved, demand for the products increases. As demand shifts toward skill-intensive products and their production increases, the demand for skilled labor expands, increasing the relative wage of skilled labor. The second aspect is the technological progress that has occurred within individual industries appears to be biased in favor of using more skilled labor. Referring to the two perspectivesShow MoreRelatedTrade Relations of the US and China in the Last Four Decades780 Words   |  4 Pagessignificantly been on the rise both in terms of Exports and imports; up to to levels of US Dollars 532.2 Billion in 2012 from a low of US Dollars 4.7 in million in 1972. In a recent wave of discussion on CNBC of how the â€Å"Trade gap between these two giants has cost the United States a whooping US Dollars 37 Billion in wages†. The increasing deficit between the two giants has been linked to the loss of wages up to the highs of US Dollars 37 Million in the year 2011 (Holliday). The study conducted by the EconomicRead MoreSo Much Inequality in Our World1677 Words   |  7 Pagesinternational production and trade of goods. Production and trade of goods between countries has been increased enormously due to decrease in oversea transport/delivery cost and the removal of trade barriers in past few years. Therefore, many products in U.S. markets are made in foreign countries, most likely in poor countries because of the promise of prosperity to poor countries. It supposed to help reduce a gap between rich and poor countries, and help poor countries to thrive economically; howeverRead MoreGlobalization and International Finance, Questions and Answ er1533 Words   |  7 Pagesover; national economies are merging into an interdependent, integrated global economic system (Hill). The word itself. â€Å"globalize†, appeared in the 1960s meaning to â€Å"make global in scope or application†. Can be traced from the Silk Road, route between China and the Mediterranean Sea, which promoted the exchange of ideas and knowledge, along with trade goods and foods such as silk, spices, porcelain, and other treasures from the East. Also when Europeans began creating colonies abroad, globalizationRead MoreGender And Race Income Inequality1473 Words   |  6 Pagesbeen a power structure; who is to be on top and who is to be in the bottom. So, it comes to no surprise that America has a growing gap between the wealthy and everyone else. The United States is known as a melting pot and a country full of opportunities for all but it is also the place where upper class makes millions in an hour and the lower class only makes minimum wage. United States thrives on promoting everyone is created and treated equally but that happens not to be the case. Polls after pollsRead MoreEssay on Reasons Behind China’s Enlarging Rural-Urban Divide1019 Words   |  5 PagesUrbanization brings w ith it a disparity between rural and urban living standards. Nonetheless, in China this gap has started to become quite severe and has become a cause for concern (Naughton 113). Chinas Gini coefficient is currently at .415, which displays the increasing disparity in the country (DISTRIBUTION OF FAMILY). The rural-urban divide begun with the different ways the Chinese government ran the rural and urban areas. The urban areas were fully under control of the central governmentRead MoreWhy China Slows Down Its Economy Essay1354 Words   |  6 Pagessince China entered WTO, China takes advantages of large population to develop the labour intensive industries like manufacturing to expand the relationship with the world by frequently international trade, as greater interaction and stronger cooperation between China and the world, Chinese economy is merged to the world economy and become an integral part of the global economy. Therefore, the Chinese slowdown is bound to affect the growth o f world economy. So the question arises, why China slowsRead MoreNon Regular Workers : A Growing Reliance On Irregular Workers1381 Words   |  6 Pages(53%) in Korea than the share of total dependent employment of 43%, which is one of the biggest contributor to the gender wage gap in Korea. Finally, the power and density of trade unions have been dwindling over the past few decades. The expansion of trade unions in 1987 after the strengthened social protection for regular workers has actually created a bigger distinction between regular and irregular employment. However in general we do see a gradual decrease of unionization in Korea which startedRead MoreAmeric A Strong Wave Of Big Corporations Picking Up And Abandoning Their American Roots980 Words   |  4 PagesIn America there is a strong wave of big corporations picking up and abandoning their American roots, and finding cheap labor in countries like China, Mexico, and Brazil. The rapidness of this epidemics begun in the 1980’s and over the course of 43 months 8 million manufacturing jobs were lost. If we do not solve this problem, we could lose the backbone that built American and the only force that could have the potential to build it back up again. Let’s face it, our economy is not stable, the nationalRead MoreEssay : Made in China1437 Words   |  6 Pages10/10/07 (3nd Revised) Made In China Everyone needs to shop. We shop for daily necessities, such as groceries, clothing, shoes, , and the many products we need for basic every day living. Sometimes, we shop in a department store when we need to purchase an occasional gift for someone; we also need to shop for lots of Christmas presents every year too. Usually, we will compare prices before purchasing, but we may not realize by much our lives are dominated by the Made in China label on the products weRead MoreThe Failure Of Neoliberal Capitalism1565 Words   |  7 Pagesmove towards political and economic freedom; on the contrary, it has done the opposite in most cases. Neoliberalism in economic terms has been forced upon third world countries and has not only decreased their economic growth but has also widen the wage gap an insurmountable amount; within the political realm, large corporations have taken over the democratic process and those factory workers who are most heavily affected by changes in neoliberal ca pitalism often lack political rights. Through the destruction