Analyzing Trade-offs In deciding whether to restrict imports to create jobs, governments must face the difficult task of comparing the costs of limiting imports with the costs of unemployment from freer trade. It is hard to put a price on the distress suffered by people who lose their jobs due to import competition. It also difficult for working people to understand that they may be better off financially because of lower prices even if they must pay higher taxes to support unemployment or welfare benefits for those who do lose their jobs.
In summary, persistent unemployment pushes many groups to call for protectionism. However, evidence suggests that efforts to reduce unemployment through import restrictions are usually ineffective. Unemployment in and of itself is better dealt with through fiscal and monetary policies.