Cheap Labor Debate

The cheap labor debate is an excellent topic for a business or MBA research paper. You will want to explore both sides of the issue in your research and explain the merits of each.

While some believe cheap labor such as sweatshops are morally wrong, others believe that these structures serve a positive function because they help other, more desolate countries earn a living. In order to appropriately consider the argument, it is important not to simply dismiss one perspective. A full exploration of both sides must be considered in an effort to ultimately mediate the situation. It can be illustrated that mediating the situation could allow for a mutually beneficial experience which both allows the multinational enterprise to enjoy cheaper labor, while still allowing the off-site location to utilize an opportunity to allow them to grow and prosper with freedom, respect and dignity.

Cheap Labor Debate - Cheap Labor

Many people associate cheap labor with a disregard and disrespect of individuals. For example, Dennis G. Arnold and Norman E. Bowie, authors of "Sweatshops and Respect for Persons", believe that multinational enterprises are actually inherently responsible for certain objectives at foreign manufacturing operation sites. These include:

• Following local labor laws
• Prohibiting coercion
• Implementing at least the minimum safety standards
• Providing a wage to employees that allows them to earn a living.

They believe that human dignity and human rights are inherent to such situations. The authors point out the argument by Amartya Sen, which states that the development of an area requires more than improve income for the residents and a more agreeable Gross National Product average. Of particular importance is the freedom of the worker, who is allowed freedom by their work.

Cheap labor, particularly cheaper labor for the enterprise investing in off-site production, does not necessitate that managers and organizations choose to either forgo human rights and human dignity or forego helping developing regions. Investing in cheap labor in a foreign or developing region should be done with the best interests of the stakeholders in mind, which includes both investors and the potential employees. If a business cannot invest in a cheaper labor opportunity to the mutual benefit of the potential employees by following through with what Arnold and Bowie have expressed as their responsibilities and duties as multinational enterprises, the company should consider remaining within their regional comfort zone. As the authors point out in their follow-up article "Respect for Workers in Global Supply Chains: Advancing the Debate over Sweatshops", "competent managers could meet their duties to workers" without sacrificing their other stakeholders and investors. The authors further their argument in their second article; it is not likely that paying employees a living wage for a 48 hour work week, which is still considerably lower in developing nations, would cause the enterprises to buckle and fold.

Cheap labor does not necessitate sweatshops. Investing in cheap labor, not sweatshop labor, could be both morally agreeable and mutually beneficial to the employees and the organization. The situation is not nearly as black and white as many debaters might project. Understanding the fundamental reality of the situation, foreign employees in developing countries do not have the same, arguably higher standard of living as the country of origin for the multinational enterprise might possess. A minimal increase would meet the duties of the multinational enterprise from a moral and ethical standpoint, while still allowing the host countries to benefit and grow in a respectful environment.