Which of the following must be true if the critics of globalization are correct?
A) The share of national income received by labor, as opposed to the share received by the owners of capital should have increased in advanced nations.
B) A decline in the labor's share of the economic pie means lower living standards.
C) The decline in labor's share of national income is due to improvement in production technology and productivity.
D) Decline in unskilled wage rates is due to the shift within advanced economies toward jobs that do not require significant education and skills.
E) The real labor compensation has expanded in most developed nations since the 1980s.

Question

Quizplus · Accepted Answer

If the critics of globalization are correct, it would mean that there has been a decline in the share of national income received by labor, which implies a smaller economic pie for workers. If this is the case, it would mean lower living standards, as there would be less income available for consumption and saving. Therefore, according to the critics of globalization, B must be true. A can be eliminated because if labor's share declined, it means a larger share is going to the owners of capital. C is not necessarily true because there could be other factors contributing to the decline in labor's share, such as global competition and weaker unions. D is related to the decline in unskilled wage rates, which is not the same as the decline in labor's share of income. E is not supported by the critics of globalization, who argue that workers have been hurt by globalization.

Which of the Following Must Be True If the Critics