Journal #11 – Addressing the Outsourcing Issue

Posted: April 20, 2011 in Uncategorized

“How could firms derive the full advantage of low cost labor and the benefits of flexible contractor relationships, while also respecting the rights of workers in developing countries?”

Is there really a “creative” approach?  The fact that these companies are using labor that costs ways less than the minimum wage they would have to pay in the United States already expands their profits by such a large margin.  Really, the only answer I would even consider is to pay these workers more.  I’m not sure how the relationship works between contractors and businesses, but I would assume that contractors are either forced with a small budget and still force high productivity, or they may be corrupt and pocketing money they are supposed to be using to provide safer and health-friendly working environments.

Really, by raising the wage of these workers by even a few dollars could greatly boost morale.  It’s not like they want to be working these jobs (especially with such difficult conditions), but rather they need it.  From the Nike article, there was a statement that said that a very small percentage of their large advertising budget actually could improve wages for these outsourced laborers.  Why then are these companies not doing so?!  Raising wages would help these laborers provide better for their families, which in turn would boost their morale and happiness in the work place.  With happier workers, it would be expected that productivity and quality of products should improve as well.  At least, that’s my rationale.

It’s so easy for me to suggest all this, though, as I feel that profit margins for these big heads in these companies are way too large.  What’s a couple million off the billions they’re making each year?  I look forward to any creative answers that my classmates can suggest, but I really can only think of raising wages. Let’s be ethical and consider the lives of others for once!!

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