Outsourcing of Low-Paid Jobs to Developing Countries
With the increased globalization, a large number of multinational firms that are located in developed countries are turning to developing countries to establish firms and carry out a number of their business activities. This practice has for a long time been referred to as outsourcing, which simply implies the transfer of a few aspects of an organisation’s business activities to another firm that has been established in another nation. According to the law of international relations, there is no undertaking that involves two nations, which will lead to an equal effect on the countries considering that one of the countries will be affected more than the other, with the effect being either positive of negative. Therefore, this law has led to increased concerns among countries that are outsourcing due to the perceived effect of the practice, even though the continued association between nations is attributed to various modern phenomena inclusive of globalization. However, for developing countries, the outsourcing of low paying jobs is not a strictly positive development because it leads to exploitation of workers, increases of the gap between social class and degradation of culture, even though it offers employment, and offers various amenities as corporate social responsibility.
One of the ways that developing countries benefit from the outsourcing of low paying jobs by developed countries is the creation of employment to the large population of peasants who would have otherwise languished in poverty. Foreign companies that find their way establish factories that offer employment to most locals in developing countries, which helps to reduce the rate of unemployment of the country that improves the economy of a country. Countries like China and Japan have been known to outsource cheap labour to developing African countries in the sector of road construction, in which the locals are the ones offered most of the hard labour. When peasants are employed, they get a chance to provide for their families in terms of food among other basic needs, which helps to reduce the poverty levels for such developing countries. In that, the living standard of most locals is raised through such employment opportunities considering that most of them are living below a dollar every day, and a small increase in their daily earning is a great impact on their economic situation (Winters, 2002). One of the examples is the Indian animation market that has been outsourced by the Americans, which was a great benefit to the animation firms in India as individuals got opportunities in the job market. Additionally, the issue of insecurity is crucial in a developing country that is mainly caused by unemployed youth who seek other ways of earning a living. As a result, these unemployed youths engage in robbery among other social vices that cause mayhem among the locals who have to close their business early in order to avoid such scenarios. However, employment as a result of outsourcing by foreign firms has helped to remove such disparate youths from the streets, which has led to improved security in various regions.
Outsourcing of low-paid jobs to developing countries is also of positive impact in terms of development to the workers considering that most of these firms observe corporate social responsibilities in the areas that they have been established. Ones the firms have been set up in the developing countries, they have to look for ways of integrating with the local community, and the most appropriate way is to give back into to the community through the provision of social amenities among others. In that, these foreign firms have helped the local in the construction of schools in areas where the access to education for pupils was under threat. Some of these firms have also helped to establish hospitals and health facilities for the locals to benefit from, which directly translates to helping local communities to access health care close to their homes instead of travelling long distances for the same. Therefore, workers end up having their children benefit from upgraded social amenities, which has mostly been the case in most African countries where foreign firms have established tea estates with inclusive of schools and hospitals for the locals. Giving back to the community directly benefits the working peasants, as they will end up paying less for their medical coverage and also spend less in educating their children among other benefits related to the corporate social responsibility of these firms.
However, the outsourcing of low-paid jobs to developing nations has various negative developments that outweigh the positives considering that most of these firms subject these workers to poor working conditions. In that, most employees are subjecting to long working hours where they have to report to work very early I the morning and leave late in the evening, an issue that translates to fatigue (Kehal and Singh 2006). In some of these working conditions, employees are not offered the right protective clothing to prevent them from the various threats that are related to the kind of work that they are doing, which has led to many of them falling sick, and even having to leave work, which might have been their only source of livelihoods. Additionally, firms do not provide medical coverage to the employees who end up using the small amount of money to treat themselves in cases of injury among other threats that they are exposed to at work. Therefore, even though these firms offer employment that acts as a source of livelihood for most workers in the low-paid jobs, the working conditions that they are exposed to greatly undermines their health, which depletes the small savings that these people may have.
The argument for individuals who support the issue of outsourcing of low-paid jobs to developing countries in terms of its benefit to workers is that the practice improves the standard of living for this group of people. Even though outsourcing leads to the creation of a middle-class economy in a country, the reality is that individual in the low paying jobs never makes it to this category. The example of the United States and Europe where textile industry was established which helped in the mushrooming of a middle-class economy is a good illustration. However, it was noted that the labour intensive low paying job in the textile industry did not help to elevate the living standards of the people employed as they went on to become poorer in the society. In that, these class of people is always being exploited by the more powerful in the society where they receive meagre wages that are only able to sustain them to the next day while the affluent people benefit or take the lions share. Therefore, the poor people in the society continue to get poorer through exploitation while the affluent individuals continue to rise in terms of the social status. As if the issue of the poor remaining poor is not enough, the issue of outsourcing has also led to the degradation of the culture that the locals cherish and have upheld for a long time.
Various people in developing countries do not like the outsourcing practice because of the social degradation that is associated with it considering that the well-developed social settings and cultures and up being restructured. The existing social settings like villages that used to be there have been transformed into modern settings where the enriched communal ties have been broken in the quest of individuals fending for themselves. Additionally, in most developing countries, a large population of people reside in the rural areas where the social settings are villages, which have not been affected by outsourcing. However, the situation appears to change as firms are finding their ways into these rural settings and threatening to snatch away the little economic power that is left of these settings. In that, the poor women in certain areas earn a living through hand making of baskets among other attractive papyrus products (Arbache, Dickerson and Green, 2004). But the introduction of firms that have been established in the regions for the large-scale production of such papyrus products that helped women among other weavers has left them helpless as they cannot compete with such powerful firms.
In conclusion, outsourcing refers to the practice of a large number of multinational companies located in developed nations seeking to establish firms in developing countries as a way of benefiting from cheap local labour. Even though the practice is seen to be of positive development to peasants in low paying jobs, it is not entirely so because it leads to degradation of their valued culture, exploits them economically and subjects them to poor working conditions that are harmful to their health. Employment opportunity and corporate social responsibility associated with outsourcing are some of the ways that workers in low paying jobs are benefiting. However, the setbacks associated with the practice are enormous and detrimental to the workers of low paying jobs because they are subjected to harsh working conditions that lead to poor health. Additionally, these group of workers in developing countries have had to forgo their long practised culture in which they were making use of locally available materials to produce products for sale due to competition from foreign companies that have been outsourced. The issue of increased gap between the middle class and the lower class economy is also evidenced considering that workers in low paying jobs are continuing to become poorer.
References
Arbache, J.S., Dickerson, A. and Green, F., 2004. Trade Liberalisation and Wages in Developing Countries*. The Economic Journal, 114(493), pp.F73-F96.
Kehal, H. S., and Singh, V. P.2006. Outsourcing and offshoring in the 21st century: a socio-economic perspective. Hershey, Pa, Idea Group Pub
Winters, L.A., 2002. Trade liberalisation and poverty: what are the links?.The World Economy, 25(9), pp.1339-1367.
