Title: Is a trade deficit a good or bad thing? - Quora
Headings: Is a trade deficit a good or bad thing?
Is a trade deficit a good or bad thing?
Content: one represents perfect inequality, zero represents perfect equality. As you can see, American incomes have been growing more unequal since 1973. Offshoring replaces demand for domestic output with demand for imports (rather than make it, we buy it). In turn, this replaces demand for domestic labor with demand for foreign labor (we hire foreigners, not Americans). This increases income inequality because it lowers American wages. How? When a business is offshored, people lose their jobs. Some of these people cannot find new work, and drop out of the labor force; the rest find other work, but usually earn less (since manufacturing jobs pay so well). In fact, the average wage cut for a worker who lost his job in an exporting industry (America’s largest exports are manufactured goods) was 17.5% (you used to make $50,000 a year, now you make $40,000).