Outsourcing and Labor Unions Term Paper

Excerpt from Term Paper :

Outsourcing Jobs and Labor Laws

Outsourcing Jobs to Foreign Countries Without Fair Labor Laws

government currently does not prohibit companies from outsourcing jobs to foreign countries that do not have unions and/or fair labor laws. Whether this practice is acceptable or should be stopped is worthy of consideration. There are two main reasons for researching this topic. First, the cost to outsource to foreign countries is often much less than the cost to pay employees in the United States to do the same work (Baldwin, 2006; Dine, 2007). That means that the profit for the company can be larger, and the amount customers have to pay for the products can be lower, which benefits both the customers and the company (Panitch & Swartz, 2003). Second, not all countries have the same types of labor laws, and some countries have no unions and few labor laws at all (Schifferes, 2004). This can mean that the less expensive labor and higher company profit can come at a serious price for the employees who are making products. Because of the risk to employees, the government should prohibit companies from outsourcing to countries that do not have proper unions and/or fair labor laws for employee protection.

Those who have the power to make these kinds of changes should carefully consider how they address the issue, but it is something that affects everyone who buys goods from U.S. companies that outsource their work (Olive, 2004). The decision-making power lies with the government, but only to a point. For example, if enough people decide not to buy goods that come from companies that outsource, those companies will have to make changes. The current view on the topic is one that is mostly ignored, largely because people do not think that much about where their goods come from (Rowthorn & Coutts, 2004). Some do not realize that outsourcing is so common, or that it often involves countries that do not really care about how workers are treated. The official position also matters, because it is one that does not say anything about the issue at all -- and it is possible that it is time that is changed.

The scope of the paper will address the issue thoroughly, and will look at the way in which employees are treated in the United States in contrast to the way they are treated in other countries to which companies commonly outsource. Major sections will include a clear discussion of the problem, solutions and advantages, and possible disadvantages and answers. By breaking the paper down that way, the researcher can show that there is an issue worth discussing, that there are solutions to the issue and advantages to correcting it, and that there are also possible disadvantages to making changes. There are, however, answers to those disadvantages, as well. The questions to be answered by the study include:

1. Is it necessary for the United States government to make changes that would prohibit companies from outsourcing to countries without proper labor laws?

2. Will making these changes drive up the prices beyond what consumers are willing to pay for common goods?

3. Are there other ways to protect workers from harm while still keeping the prices for goods at reasonable levels and protecting company profits?

The research plan for this study will involve examining the main countries to which companies outsource, and comparing those countries with the United States when it comes to fair labor practices and union involvement. This can be done through an examination of primary and secondary sources that provide information on these countries. The countries chosen will be China, India, and Malaysia, as these are the top three countries to which U.S. companies outsource their goods. By using appropriate resources that provide accurate information about these countries, a true comparison can be created.


Baldwin, R. (2006). Globalisation: The great unbundling(s). Chapter 1, in Globalization Challenges for Europe. Secretariat of the Economic Council. Helsinki: Finnish Prime Minister's Office.

Dine, P. (2007). State of the unions: How labor can strengthen the middle class, improve our economy, and regain political influence. NY: McGraw-Hill Professional.

Olive, B. (2004). Outsourcing growing, despite controversy." Power, 148(4), 19-20.

Panitch, L. & Swartz, D. (2003). From consent to coercion: The assault on trade union freedoms. (3rd ed.). Ontario: Garamound Press.

Rowthorn, R., & Coutts, K. ( 2004), Deindustrialization and the balance of payments in advanced economies. UNCTAD Discussion Paper No.170.

Schifferes, S. (2004). The trade unions' long decline. BBC News.

Part I -- Persuasive Paper: A Problem Exists

Outsourcing is an important part of what takes place in the majority of American companies that make goods and services (Davies, 2004). However, many of the countries to which the outsourcing is done are not "safe" for employees. These countries do not have proper labor laws and do not provide union representation for employees in order to help protect them (Hira & Hira, 2008). This is not something about which the people who buy the goods and services spend much time thinking. In fact, it may not occur to them at all. Because they live in the United States, they generally think of other countries as being similar in the way they handle everything. This is far from the truth, though, and one of the reasons why it is very important for companies to consider where they are outsourcing their labor. Without labor laws, employees can be subject to unsafe and even deadly working conditions, be underpaid, end up mistreated, and have a host of other problems for which they may have trouble getting any type of help or legal representation.

It is not that outsourcing, in and of itself, is a bad choice, but only that the places to which companies choose to outsource can put employees into a bad situation. Countries that do not have labor laws -- or that do not have laws that are close to what the U.S. has in place -- can be very dangerous places to send outsourced work (Forey & Lockwood, 2011). The goods may be the same quality, but the way the employees who live and work in the outsourcing countries are treated can be vastly different from how they are treated in the United States. Malaysia, China, and India all have very different regulations for workers when compared to the U.S. The absence of labor unions is but part of the problem, as the labor laws that are in place are often not enforced if it is not convenient or if it would not allow the company to make enough money (Davies, 2004). That can lead to abhorrent working conditions, injuries, and even employee deaths. There are three different problems that can and should be addressed.

The first problem is a social one. How people are treated is often a product of what they allow (Davies, 2004). If employees in these countries do not stand up and say that they demand better treatment, they will not receive better treatment. However, that can be very difficult for the employees to do, often because they do not understand that they have the right to do so, and that they may be able to change their conditions (Hira & Hira, 2008). Many of the people who work in countries like India, China, and Malaysia for companies that are outsourcing from the United States are not highly educated, and they spend their days tolling in a sweatshop style of environment (Davies, 2004). Depending on the product being made and the company producing it this is not always the case, but it is not uncommon to see these types of issues play out in a number of companies and countries. Socially, the workers may not even realize how badly they are being mistreated.

By hiring uneducated and undereducated workers, and by hiring people who are very subservient and/or who badly need money to feed starving families, companies in countries where outsourced work is common are able to avoid proper working conditions that might cost them more money (Forey & Lockwood, 2011). In some cases, the company headquarters in the U.S. does not really understand how badly the workers in other countries are being treated, but in other cases they simply look the other way so they do not have to deal with the issue and its lack of social acceptability (Hira & Hira, 2008). It is unfortunate that human beings can treat one another that way, but it is all too common in a number of countries. It is also not the only issue to be considered where proper treatment is concerned, as there are a number of other problems that come along with outsourcing.

Ethical and moral dilemmas can also arise, and should not be overlooked by U.S. companies wanting to outsource to other countries to save money. It is difficult to understand what type of person would allow horrible mistreatment of human beings just to save a few dollars, but it can and does happen. Ethics and morality…

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