Question

Labor unions maintain that protectionism is necessary to preserve and encourage the growth of American jobs. Opponents of labor unions believe that protectionism rewards and encourages inefficiencies while increasing cost to consumers in order to pay for the inefficiencies. Take an objective view of these contrasting opinions and decide what you think about the topic.

Answer 1

protectionism is being pursued across the world and it has marked beginning of retreat of globalisation. Labor union is ardent supporter of protectionist policies. Protectionists policies safeguard domestic industries against external competition. Thus, domestic jobs are protected and sustained. Although jobs are protected, side by side there is rise in cost of production. Hence, domestic consumers penalised in form of inflated prices of goods and services.

Over the long run, protectionism renders domestic industries less competitive. hence, protectionism is desirable from long term perspective of country. It reduces consumer welfare substantially or dead weight loss rises alarmingly.

Protectionsim can be pursued only to inhibit dumping pricing and such as predatory pricing keep firm out these trap.