Overseas Manufacturing, labor standards
Do American companies with factories overseas exploit workers with low pay and poor conditions? Should American consumers continue to buy products made in such factories? Should the US government seek to include labor standards in the terms of trade deals with foreign governments?
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Companies build factories overseas for one primary reason: Foreign workers are cheaper. When compan...
Companies build factories overseas for one primary reason: Foreign workers are cheaper. When companies are driven by the profit motive, they have an incentive to pay as little as possible and to skimp on equipment and procedures that would provide safety and comfort to workers. Workers need to be protected from corporations that care more about profits than people.
Manufacturers know that mistreating workers does not pay in the long run. They know that a healthy and a happy workforce is going to be more productive and give their operation long-term stability. Certainly manufacturers care about the bottom line, and it is precisely that concern that motivates them to treat their workers well.
Some foreign governments are so eager to attract American investment that they favour management ove...
Some foreign governments are so eager to attract American investment that they favour management over labor. They do not protect their own citizens with strong labor laws, and they do not guarantee workers the right to form unions in order to press for better pay and conditions. Workers are at the mercy of their employers.
The presence of American companies has a direct benefit on the economies of their host countries. Workers are taught skills and exposed to new technology. Moreover, a strong industrial economy has been proved to be the best way to lift people out of poverty. In time, foreign workers will achieve wages and working conditions comparable to those enjoyed by American workers today. In 2010 this has been seen in China, where a series of strikes at foreign-owned factories have led to workers winning large pay increases, a development that has been publicly welcomed by the AFL-CIO. And in both China and India the willingness of trained workers to move jobs in search of better wages and prospects has forced employers to pay better and offer good working conditions in order to retain their staff.
American companies located abroad have no incentive for making commitments to the local community. ...
American companies located abroad have no incentive for making commitments to the local community. If the workers become too expensive, or if the companies are forced to spend money to improve conditions, they simply pull out and move to another country with cheaper workers and lower standards. There is already evidence that this is happening in China, with firms relocating to cheaper Vietnam as Chinese workers become more expensive to employ.
Wages may be low compared to US standards; however, the cost of living in these countries is also low. It is absurd, therefore, to expect American companies to pay the standard minimum US wage in a country where that wage has ten times the purchasing power that it has in the United States. And Americans also benefit: as consumers from the cheaper goods that imports from lower-wage economies bring, allowing US citizens a higher standard of living, and as investors through schemes like mutual funds and pension plans that do well when American companies make good profits.
Because they have no union protections, workers are often asked to work absurdly long hours, with no...
Because they have no union protections, workers are often asked to work absurdly long hours, with no extra pay for overtime, and in dangerous conditions with hazardous materials. They fear that if they complain, or refuse to work when demanded, they will be fired and replaced by someone else who is desperate for a job.
Activists like to say that factory jobs in foreign countries are intolerable and undesirable, but the facts do not support that assertion. People are eager to work in a factory, when their alternative is making less money for a full day of backbreaking agricultural work. To the workers, jobs in American factories represent opportunities to gain a higher standard of living. What is more, conditions in foreign-owned factories are almost always superior to those of domestic companies, and create positive competition in labor standards that benefits all workers over time.
Child labor is condoned in many countries where American companies do business, but US companies sho...
Child labor is condoned in many countries where American companies do business, but US companies should refuse to take part in this abuse. There is little hope for the future of countries where a child must provide labor instead of getting an education.
The American objection to child labor is founded on the idealistic notion that children should be in school. But in many countries where the factories operate, universal schooling is non-existent, and the child who is thrown out of a factory job goes back on the street. In many cases, the child who does not work in a factory will simply work someplace else; in poor families, it is expected that anyone who is able to work will earn a wage to support the family.
We should ensure that all trade deals with foreign governments include labor standards. By requirin...
We should ensure that all trade deals with foreign governments include labor standards. By requiring that overseas factories have to pay living wages and cannot exploit their workers with unreasonable hours and dangerous conditions, we can ensure a better life for millions of people in developing countries. We can also guarantee that American citizens are not exposed to unfair competition from exploited workers abroad, protecting the jobs and living standards of tens of millions of hard-working Americans.
The demand for labor standards to be attached to trade deals is an example of protectionism. Its true aim is not to improve the conditions of foreign workers, many of whom will become unemployed if wages are raised to an uncompetitive level, but to favor American factories by artificially increasing the cost of imports. In the short term, this will increase the cost of living for American consumers while holding back the growth of developing economies. In the long run it distorts the free market, removes incentives for companies to become more productive and innovative, and prevents investment being directed into areas with the most potential for growth; as a result, we all become poorer.
What do you think?