But the exploitation may not be concerned with where the multinational moves to. For example, what if a large sports/leisure footwear manufacturer originally operated from the US. The product in the shop cost the consumer $100 whilst the workers were paid $5 per hour. The company sees an opportunity to pay lower wages and moves to SE Asia where it pays its workers $1 per day. Yet, the product still costs the consumer $100 in the shop. That sounds like someone is being exploited to me.
exploitation on whom? The consumers or the labourers? Labourers are better off financially than they were before. Consumers aren’t because cost of production has decreased but prices remain the same. Seems like the consumers are being exploited not the labourers. 
Peace
That was my point 
lol…In that case, good. Now let’s not stray from the point of the thread.
Peace
But it’s all intertwined, isn’t it? Companies relocate because they see a way of exploiting someone, not because they see a way of benefiting someone (other than shareholders!). And just because they pay enough to stop their workers from starving, is this enough? Surely if we are going to export our manufacturing to other countries, we should export our standards as well.
Hi,
Well I can see why you think it is exploitation and yes it’s all intertwined, after all a decrease in the cost of production means more profit if the price is not altered. I don’t think companies decide to move just to treat people unequally, I mean there has to be an opportunity. One can see it as an opportunity presenting itself and companies choosing to go where the opportunities are. But I can see why you would think that an increase in profit means selfishness, it is a common perception today. If you think about profit in terms of a salary, I guess it would not be considered selfishness. If you think of it in terms of means of producing more so you can consume more, I guess I would not be selfishness or maybe it would.
Anyways, I could think of a few reasons why there is such a difference in the salaries though:
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If moving to another country does not possess an opportunity, companies would not move. It would be stupid to move to another location and have the same risks and expenses. The company might as well stay put and not bother with the expenses of relocating. Unfortunately, some people are willing to work for less salaries (as it may be better than they are currently getting) and that is an opportunity both for businessses and for the labourers of the new location.
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Exchange rates are very important to look at here. In some countries, people make about $30000 a week but that is only equivalent to approximately $30 Canadian dollars. However, that $30000 is sufficient for the person in the third world country to live on. So really the value of money on an international basis is not the number of notes (for example $4 Canadian should be equivalent to $4 Nuevo Sol, this is not the case). If I were to pay Peruvians $4 Canadian dollars, it can be exchanged for Nuevo Soles which would essentially give the Peruvians a financial advantage to a Canadian worker who gets payed $4 Canadian. I guess the point here is that the cost of living changes every where. What can barely buy milk and bread in Canada, can buy a whole lot more in third world countries. So no one is taking advantage of anyone, as the salary provide the same financial stability.
3)Which brings me to my next point. If a corporation do decide to move to Peru and they decide to pay them equal to that of a Canadian labourer, then many Peruvians from other higher sectors (who may not be earning as much) as well as impoverished citizens will decide to work with that corporation. This will lead to an excess supply of labour (skilled people will probably be able to secure a placement with that corporation rather than people with less or no skills). In addition, when there is an excess supply of labour, there will be some individuals who will be willing to work for less than that $4 Canadian dollar, as anything less may improve their current financial status and still be equal to or more than the current minimum wage of their country. Hence, that $4 Canadian salary will decrease to something much lower anywys, as some citizens don’t mind being paid less.
4)Governments of other countries control the minimum wages, not corporations. And hence, that should give you the idea that people are not being underpaid (with respect to others in their countries).
5)Foreign investments in countries, help to stimulate that country’s economy. For example, the economy of Peru is booming right now because of the tremendous foreign investments. Although, citizens are being paid what is considered the minimum wage of their country, there is more spending occuring because of the availability of disposable income. I agree that when the cost of living increases that wages should go up because disposable income will be less. In some third world countries, the government has opted to increase minimum wage (e.g Peru).
And so some companies do go into countries with their standards. But there is no point relocating if there is no opportunity. They follow new regulations under new laws, they provide jobs for impoverished people, the stimulate the country’s economy (tax dollars, etc), etc.
This can go on forever, because I know that the $1 is not numerically equal to $4. However, the advantages of the $1 and the $4 to citizens of both countries may probably be the same.
Peace
No time to edit what ever mistakes, but I’ll check back later and clear any misunderstandings.
curious_rina,
You might want to examine this a little closer. Many of the governments in the poorer countries are suceptable to pressures and/or perks coming from multinationals. You might find that in some of these countries the ‘government’ may announce some sort of minimum wage, but the large corporations called the shot.
You mention the scenario of a multinational ‘moving’ to a poor country because they see an opportunity. An opportunity for what? To help raise the standard of living in that country? To see that all the barefoot children have a new pair of tennis shoes? Hardly. The opportunity they see is greater profit. That the host country may derive some benefit from the relationship is simply a side-product, and if cheaper labor suddenly appeared somewhere else, they’d move to the cheaper labor force overnite.
The advantages of moving jobs to a poorer country are many. It isn’t just cheaper labor costs. There may be tax advantages. Fewer requirements and lower standards -ie- much less government oversight. No expectations of ‘put back’ in communities, states or provinces, or the host country. Any or all of these things aren’t benefits resulting from altruistic efforts by the corporation, they are ‘opportunities’ to avoid the costs associated with more developed countries.
Whether we call it opportunity or exploitation would depend on the intent of those corporations. Call it what you will.
JT
Tentative,
True, but you seem to forget that the economy is not a zero-sum game.
It is entirely possible for both parties to gain from a bargain. Even if a corporation makes a profit it is also possible that the employees, and the host country, also gains from the implantation.
It is possible to have more winners in this game than losers!
And it does not really matter if the reasons for moving to one country or another are altruistic or not.My employer pays me a decent wage, but I have no reason to believe that he does it because he feels he has a duty towards me - he wants my labour and I provide it. He scratches my back and gets his pound of flesh: that’s a reasonable deal to me.