Armies of low-wage foreign workers haunt many Americans’ dreams.
Can you protect your financial future? Might pressures from
international trade even boost your income? Fortunately, the
answer to both questions is "YES." Before outlining a possible
plan of action, however, you need some background information.
Specialization and exchange improve standards of living
everywhere. International competition is also a powerful force
to equalize prices globally, both for goods and for resources.
Some economists describe a law of one price; others invoke a
factor price equalization theorem. A stereo sold in Budapest
must generate the same net revenue to a competitive producer
(after transportation costs, taxes, etc.) as one sold in Quebec.
International competition in certain labor markets also tends to
equalize pay for, say, basketball players in Orlando and Rome
(after adjusting for costs of living, regional preferences,
etc.). But how does trade exert pressure to equalize wages for
all comparable occupations in Ba