For this week’s discussion, I want you to think about why labor standards vary across countries. Illustrate your answer with examples and compare at least two countries’ labor standards, how they differ, and what the implications on international trade are. Use at least one academic source to support your answer.
Labor standards vary across states, mostly due to differences in factor endowment and income. One example of this is low pay for employees. A minimum pay salary that exists in wealthy states would not work the same as it is in developing countries. This is because using similar salary levels might cause manufacturing companies in developing countries to close down. The situation can also enhance unemployment other than increasing individuals’ living standards.
In addition, labor standards are other fundamental rights of employees around the world. They always create discourse between states. For instance, in a high-income country, the pay offered might be seen as exploitive, while the same payment might be acceptable in underdeveloped nations. Consequently, the roles played by religious or cultural values might differ in two types of states.
Differences in labor standards among states of different development levels are growing in significance as a subject in international trade. For example, the working conditions in China are not favorable as compared to the United States of America. Workers in China are exposed to terrible working conditions, pollution, confinement together with long working hours. This existing condition in China has a negative impact on the trade market since it lowers the production rate. Manufacturing companies in such countries also tend to produce low-quality products.
However, this is different from U.S. labor standards. Workers in the United States of Americ have various legal protections. They are allowed to work for a minimum number of forty hours per week. The states also ensure that the employees are working under favourable conditions. In addition, employees are given overtime pay incase they work beyond the normal time. Hence, the labor standard in America has positive implications on trade. As workers are set free and comfortable at the work place, production rate increases thus affecting trade supplers positively in the country.