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The Effects of Globalization on Labor Standards

Updated on April 2, 2018

With most the recent advancements of technology, the ability to create ties with other foreign markets has become much larger and more available. Because of these opportunities and abilities, globalization is becoming more and more prominent in the big business economy. Going global has rapidly increased the progression of the economy being propelled by buyers. Buyers are obtaining more and more power and influence over the markets, which in turn, many larger companies have decided to act to keep up with the pace and demand of their products. One of the most popular and highly recognized topics on globalization is workers’ rights and labor standards regarding the outsourcing of company manufacturing.

Outsourcing is contracting work to a third party, an outsider or to a foreign location. This allows many firms and large companies to seek more efficient productivity at lower costs. Many companies have started to outsource their manufacturing labor to foreign countries like China, India, Southeast Asia, and Central America, where populations are high and living standards are lower, creating an enormous work force, and in some circumstances and over supply of labor. In these circumstances people are willing to work for less and therefore labor is significantly cheaper for the multinational companies. Outsourcing for cheaper labor costs gives many companies an advantage of lower costs, an expansion of their location, and a reduced political and economic risk. For example, many large apparel companies choose to outsource their manufacturing because they are still receiving quality labor at lower costs. And with rising demands and mass production at lower costs, it eventually leads to increasing income. Which as we all know is obviously the main goal in business. Aside from the provided benefits of this well-known business decision, there comes consequences and other difficult decisions.

Large firms are primarily seeking foreign countries with an interest in lowering costs of manufacturing. While, many foreign countries are also willing to jumping at every opportunity to enter or become involved with the world’s largest and wealthiest markets for economic benefits. As a result, this often creates a two-way street, one lane providing lower costs and the other providing free access to a wealthy market. This illustration often imposes temptation both ways with some lack of consideration. When encountering this enticement workers’ rights and labor standards should be discussed. For example, who’s responsibility should it be to enforce labor standards? Should it be mandatory to implement them under their contract? Answering these questions are quite complex. First, we must look at what laws or regulations have already been put into place, what standards are of high importance to each party, and how certain domestic standards would affect the foreign country engaging in business.

It is almost collectively agreed upon by most countries that forced labor and slavery are unacceptable. However, the United States has acknowledged specific labor standards that are important such as the safety and conditions within the work place, and reasonable wages, which other countries don’t hold at the utmost importance. It would make sense from a domestic standpoint to require our trade partners to follow a common set of core labor standards. However, looking at the effects of implementing these standards into another country may not be as reasonable.

Let’s take a look at some of the consequences. First and foremost, outsourcing manufacturing from the United States to another country decreases a large number of domestic employment opportunities. Which greatly effects the employment rates and market here in the U.S. However, looking at it from an international standpoint, many countries that are under developed or impoverish don’t maintain very high labor standards, if at all any. Therefore, in many countries working conditions are not the best. With globalization and technology advancements today it has made it especially easy to advertise and expose those types of conditions, such as forced labor, child labor, and poor working conditions. With that being said, for global companies it doesn’t set a good reputation when advertising the harsh treatment their foreign employees endure, while the company just turns a blind eye. Turning a blind eye to the situation or ignoring the practices of their foreign low-cost manufacturing contractors, failing to implement basic protections for their workers, often enhance their competitiveness within the market as a result of their immoral actions. Taking a moral standpoint, as in many debates, labor standards should be implemented to protect the basic human rights of every worker. However, there are many other elements to take into consideration when trying to implement one country’s labor standards into another country.

Second, looking at how implementing labor standards may affect the foreign country and the possible reasons it is to hard or almost unreasonable to try to implement them. Most of the developed and wealthy countries limit child labor in the market because they prioritize getting an education and preparing youth to enter the work force. However, in the undeveloped or poorer countries education does not take precedence. That is, the level of protection and educational resources in countries of poverty may be far below the standards of a wealthy country and education is often not even available or even an option. As well, many families from other countries depend on the earnings and wages of their children. Their earnings are a crucial part of the well-being of the family and therefore a restriction as such would be detrimental to many families. With such development and economic differences between two countries, certain protections or standards may impose a burden or be considered inappropriate because of the difficulty for the country to abide.

Overall, globalization can be a positive way to expand human rights and values around the world from more developed and wealthier countries to those lesser. However, it is often more complicated than that and more elements have to be factored into play and considered. Globalizing must take into consideration its foreign and Domestic effects before, making the requirement of certain labor standards. At the same time accepting the inability to implement our labor standards in foreign countries, in a sense lowers our labor standards. When considering all the elements of globalization, do the positives of making a profit out way the negatives dealing with the implementation of labor standards?

© 2018 Mikayla Hargett

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