Eco 200: outsourcing

[kingrat]

(group) Why might a multinational corporation with identical plants in different countries pay different wage rates to workers in two different countries even though their skill levels are the same? Does this strike you as unjust? Why might the higher-paid workers object?

Multinationals might because there are fewer opportunities for workers in country B than country A. So there is a higher supply of workers at the lower price. If they had better opportunity they'd go for it.

It's unjust for the workers of country A. But extra-just for workers in country B. Humorous phrasing aside, someone in country B would consider it unjust that the money goes to someone in country A when they are willing to do it for less. Workers in country A would consider it unjust as they are unable to make a profitable living due to costs that are higher than what are those in country B make. Either way there is injustice.

Higher paid workers might object because the work can be moved to country B, and their opportunities are then fewer. So either they take less money from the multinational, or they take less because they are laid off with X fewer opportunities available, and they take less because there are fewer opportunities.

Comments

[kaosqueen.livejournal.com]

heck not just form country A to country B, but i look at freinds in otehr parts of the country where housing is 1/2 of whatit is here (not too mention cheaper food and gas)

in fact some compnaies are starting to give supplimental pay to workers who live in certain cities/regions to offset the much higher cost of living...

[kingrat]

Why would they do that if they can get the labor cheaper elsewhere?

[izzbot.livejournal.com]

I was going to say the same thing... you need to take into account the cost of living in the two different areas.

[kingrat]

Not really. All a multinational need do is take into account the cost of other workers elsewhere. The workers need to take into account the cost of living.

[izzbot.livejournal.com]

Yes, but the "justness" of the issue is based on how much a worker makes in comparison to the cost of living in the country that they are based in, as well as comparable wages in their area. The people in country A might be making twice as much as the people in country B, but if the cost of living is 3 times higher, there is a potential issue there.

Otherwise, your answer covers it well.

[kingrat]

The instructor and the book's author argue that the "justness" depends only on whether the terms of employment are clear to the participants.

[izzbot.livejournal.com]

Their argument is strong, but is still worth debating. With the terms of employment clear (and assumedly lawful), it's up tot the workers in each of the nations to choose whether they want to work there or not.

However, it will always come across as them using the terms to justify what would be considered good business practices. I will ascertain that if the wages in each country are based relative to the standard of living in the relative countries (adjustments being made for the company's manpower and quality needs), you can deal with any potential moral arguments brought up to you much easier.