Eastern Enlargement and Western Labor Demand

The closer integration with Central and Eastern Europe and the emergence of China and India as producers for the world market has created concerns about the consequences for the labor markets in the West. The most commonly expressed concern is that the increased competition from low-wage countries leads to job losses in the high-wage economies in Western Europe and North America. Whereas this concern is wide-spread among the public and often voiced by high-level politicians, it is rarely expressed by economists, especially those who work in the field of international economics. This paper will try to lay out the reason for why economists tend to much less worried about the labor market consequences of competition from low-wage countries than the public at large and the policy makers in Western Europe.