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Is it Immoral for US Corporations to Use Cheap Overseas Labor?

Od:
sandradavidson 
Data:
28 października 2020, 21:18
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In the contemporary business world, outsourcing is one of the most contentious issues, especially when it involves cheap labor and the reality that cheap labor is available in developing nations. A number of US corporations have embarked on this practice with the aim of maximizing profits, which increases shareholder satisfaction and guarantees the success of the corporation in future. Nevertheless, there are ethical issues underpinning the outsourcing of cheap labor, which has drawn divergent views regarding the issue with some claiming the practice is ethical while others maintaining that the practice is immoral, and that corporations should desist from such practices. This controversy does not revolve around the process of outsourcing itself; rather, it involves the ethical issues surrounding the outsourcing process.

Despite the fact that outsourcing of cheap overseas labor has a become a business norm in the United States, the practice has resulted in several questions regarding whether the practice is immoral or not with respect to the impacts the practice has on the United States. Making a decision requires an analysis of both positive and negative aspects of the practice, which is the focus of this paper.

Using Cheap Overseas Labor by Corporations is Immoral

Whereas using cheap overseas labor has a number of positive ethical facets, few corporations can public admit that they use overseas cheap labor due to its negative implications. From an ethical point of view, there are several arguments opposing the use of overseas cheap labor. The first argument against this practice is that the substantial profits made from using cheap labor are only retained by the rich, whereas the middle class continue losing their purchasing power and paying higher taxes. Since many people perceive government’s distribution of economic wealth with negative sentiments, any business practice adopted by corporations that seems to contribute to this discrepancy and economic disparity will be perceived negatively by the public. Furthermore, overseas workers do not make any contributions to the United States Social Security and tax base. The high tax revenue obtained from high corporate profits cannot account for the amount that the government loses on income taxes. The negativity that the US citizens feel results from the loss of several job opportunities and the discrepancy regarding the income play an integral role in opposing the practice. Fundamentally, using cheap overseas labor disregards the community and employees who helped the corporation attain its success in the first place; therefore, business success is not only about increasing profits but also developing the community. The use of g cheap overseas cheap labor results in fewer jobs in the United States, which causes the economy to weaken. With more people working in US, more cash is accessible that they can spend on goods, which implies that more jobs can be created to meet the demand for those goods. Therefore, using overseas cheap labor by American corporations can damage this virtuous cycle in the country’s economy.

The second argument opposing the use of overseas cheap labor relates to sloppy Human Resource policies and substandard work environments. Most US-based corporations outsourcing cheap labor are often characterized by exhausting workloads and other cases of worker abuse. Several workers at Foxconn factories located in China complained of exhausting workloads, cramped dormitories, workers standing while working, and unpaid overtime work. The report states that the living conditions are “unpleasant and cramped”, wherein about 20-30 individuals share a 3 bedroom apartment, and that the use of electrical appliances consuming high energy such as laptops and kettles is prohibited. These poor working conditions and discriminating HR policies cannot account for the alleged benefits of using cheap labor on account that the end does not necessarily justify the means.

Opponents of overseas cheap labor also argue that the practice results in the transfer of wealth from the United States to overseas. For instance, India’s middle class has grown to about 300 million at the expense of Americans. It is imperative to evaluate the amount of money that these outsourced jobs would contribute to the Internal Revenue Service, Medicare, and Social Security; instead, outsourcing cheap overseas labor results in a permanent underclass. Using cheap overseas labor is disastrous to the US economy and related variables such as unemployment. Whereas cheap overseas labor benefits the corporations, it hurts the US economy substantially by eliminating the manufacturing jobs and also allows corporations to evade their tax burden. Using cheap overseas labor is also seen as a form of greed, where US corporations benefit from huge profits while leaving employees who were once loyal to the firm unemployed. It is simply unfair for American jobs to be transferred overseas while they can be done by Americans.

Using Overseas Cheap Labor is Moral

Those arguing that the use of overseas cheap labor is ethical use the view that when goods are manufactured using overseas cheap labor, it is more logical to import the product than produce it domestically. This argument draws upon commonsense reality. Usually, it is relatively cheaper to produce goods in a country having cheap labor; in this regard, the best strategy that the company can undertake to maximize profits and satisfy its shareholders is to use cheap overseas labor. Advocates of outsourcing cheap labor by corporations maintain that markets usually control themselves, and that American corporations can only remain competitive by looking for means of production that can guarantee profitability. Without using cheap labor, the corporate America is likely to fail.

The fundamental argument is that businesses have the main objective of making money by manufacturing products and services and selling them to consumers at the least price. In this regard, there can be substantial cost difference between when cheap overseas labor is used and when local labor is used. This cost difference allows business to achieve their objectives, and therefore the use of cheap labor can be justified. In addition, US corporations should compete in a global economy, which means they are allowed to hire globally. Competitive advantage is vital, and the use of cheap overseas labor is one of the strategies that US corporations can adopt.

The second argument in support of US corporations using cheap overseas labor is the increasing need for corporate social responsibility in the sense that these corporations provide employment to people in developing countries. Using cheap overseas labor plays an integral role in opening the doors for jobs for people in developing countries. Fundamentally, using overseas labor helps American corporations to build the middle class in developing countries. Outsourcing cheap labor will play an integral role in helping Americans to develop into a nation comprised of consultants, strategists, and entrepreneurs within 10 years.

There is a difference between partnership, charity, and theft, outsourcing cheap overseas labor is a form of partnership but not theft. Corporations that use cheap overseas labor act in the interests of their customers and the larger public. For instance, paying US workers higher wages compared to foreign workers is not advantageous to the local economy. Employees often want to be paid the highest wages. With businesses paying their employees high salaries, they must transfer these costs to the consumer. However, consumers often want to spend the least possible. From the consumer’s point of view, it is more logical to pay the employees the least possible wages in order to lower the prices of products/services.

In addition, on the assumption there is equality regardless of geography, it is logical to argue that it is more ethical to offer employment and income to people living in developing countries than those living in First World nations, where they can easily access employment and other welfare services. It is imperative for people not to draw the line between patriotism and morality. Moreover, on assumption that Americans have the same qualifications and skills with workers in developing countries, it is more logical, from a business point of view, to pay one worker $10 per hour instead of paying a worker who will do the same work for $ 35, based on assumption that the customers are not concerned with the people employed by the company.

From the discussion, it is apparent that the use of cheap labor by US corporations benefits consumers and shareholders at the expense of workers. Arguments supporting the view that the use of cheap overseas labor is unethical stems from the fact that outsourcing cheap overseas labor is disastrous to the US economy at the expense of foreign economies. The argument raised to support the view that the use of cheap overseas labor is ethical include increasing need for corporate social responsibility in the sense that these corporations provide employment to people in developing countries and the reason the businesses primarily exist to make profits. However, ethical issues arise regarding how corporations utilize this cheap labor such as poor working conditions, discriminatory HR practices, overworking employees, and poor wages.

About author

Sandra works as an author and participates in works such as fresh essay. She is responsible for any task. Sandra participates in many professional rankings and thematic conferences. Professional growth is the main goal of this young specialist

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