The $750,000 Steelworker Case Study
Trade restrictions are often discussed and passed by politicians when there is a need to improve an economic situation of a specific industry.There are some advantages to a trade restriction, which usually only last short term, and disadvantages that will end up occurring long-term. Such restrictions will not only affect the import industry but will end up affecting the export industry as well. Import and trade restrictions are implemented with the belief that they will help protect jobs of a specific industry and increase employment in those industries. Short term, the workers of these industries are the ones who will benefit from the import restrictions, as their jobs will be protected. Additionally, it will improve the economy with an increase in the demand for domestic goods, which will boost the country’s GDP. Eventually, the long-term effects of these restrictions will lead a decline in overall employment, an increase in foreign goods and an increase in domestic goods. The export industry will be adversely affected by the restrictions since we pay for our imports with our exports. If fewer goods are being exported, the jobs in the export industries will decline and there will be less of a demand from other countries to trade goods.At first, it appears the thing that was designed to protect a domestic industry in the long run can significantly hurt the economy and cause a decline in employment. The Steel Industry is a perfect example of what happens when import restrictions are implemented in order to protect jobs and improve job opportunities in the steel competing. The cost of protecting a steelworker’s job is an estimated $750,000 per year.It would in fact be cheaper to give each steelworker a payment of $375,000 per year in cash rather than impose restrictions on imports of steel. Although, import restrictions are imposedinstead giving cash payments because politicians are looking to save jobs, improve job...
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