What interests me the most from the Greenfield Geography website, is the "Global Services Location Index" which is about offshoring. In this area of the website, it displays a snapshot of the top countries for offshoring.In order for the countries to be considered as a place ideal for offshoring, the country has to be developing, economically, while the level of skill is high, but considered to have cheap service. The top country for offshoring is India, and with China next.
This is evident in many products that we may own, as most of these products were produced in different countries like India and China. Many companies offshore their production to other countries with cheaper service in order to save costs for the business.
Causes and Effects:
- Offshoring greatly benefits a company as it cuts down greatly on costs
- Allows countries that are developing to develop economically even more, as wealthier countries are offshoring their production, etc. to these countries.
For example:
The United States or American companies/businesses offshoring their production to less wealthier or developed countries like India and China. Because of this, it has been stated that there has been a great increase in the economic status of China, therefore it has been a benefit.
However, these American businesses, when offshoring production to countries like China and India, the wages for these workers are often very minimal. Due to this, it is sometimes criticised to be exploiting the population, as the prices these products are sold at, is much much much higher than the wages of the workers.
Question:
Do you think that offshoring is great for these countries, or is this considered to be exploitation of the less wealthier population, as they aren't getting paid as much as they should be (based on the prices the products they produce is sold at, for example, Nike, Apple, etc.)?
I thought about your question and my first response was: they're definitely exploiting the poor. Then i thought, well maybe if the government increased minimum wage or improved labor rights, things would be ok. Then I realised that these businesses would consequently just take their business elsewhere (to the cheapest takers), and cause severe unemployment. So I think that we would need to cooperate on a global scale to allocate wages properly for increased labor standards worldwide (seems almost unfeasible). Or maybe everyone could just stop having a billion kids so that people don't get so desperate (sustainable future pls). Nice article.
ReplyDeleteI do think that offshoring is exploiting the poor. But even though they may be exploiting the people, they are still providing jobs for them, which results in an economic increase. This leads to the fact that the rich gets richer, while the poor gets poorer since low economic countries allow exploitation. Now that the word's population increases throughout time, this leads to higher unemployment rates, which leads to more exploitation.
ReplyDeleteI would agree with what Kevin and Alisha said. Maybe TNCs should be responsible to set up unions, provide minimum wages, and provide benefits for outsourced workers.
ReplyDelete