Introduction
What does it mean to outsource labor overseas and how can it be both harmful and beneficial to companies, consumers, and workers? By manufacturing goods in countries with less restrictive labor laws and lower wages compared to home markets, companies can reduce costs and sell products at lower prices. This sounds like a win-win for everyone involved, however the reality is never quite so simple.
– Moving manufacturing overseas can mean a loss of jobs, and even a decline in entire industries in that home market.
– Less restrictive labor laws and lower wages can also mean unfair practices and wages, and unsafe working conditions. The recent fire in a Bangladeshi factory highlights this.
– As economies grow and cost of living increases, wages are expected to increase as well. Companies can’t rely on cheap manufacturing for long and are continuously looking for cheaper options.
A4SC Resources
The below resources include relevant videos and lesson plans from our content library that will help contextualize this current event within broader, more enduring, concepts.
Migrant Workers: A Global Labor Crisis – Migrant labor is a pressing humanitarian issue. Given the economic system in which we live, the need for human workers will not dissipate. What can be changed is the conditions under which these migrant workers perform their daily tasks.
Globalization: International Travels of a T-shirt – Access to the global market means companies can ship parts of their production processes to countries with cheaper labor. In the case of the textile industry, this search for cheap labor meant the US textile industry basically collapsed.
Sustainable Development Goal 8: Decent Work and Economic Growth – Economic growth is essential for improving people’s everyday lives. However, many workers are subject to unsafe conditions; in a study based on data from 55 countries, there was a median of three deaths and 889 non-fatal injuries per 100,000 employees.
Discussion Questions
- Why do companies take pride in, and advertise the fact that their products are entirely made in the United States? Would you rather buy US-made products? Would you be willing to pay more?
- Why should we care about unfair labor practices in other countries? Should companies be expected to uphold the same standards in every country they operate in? Why?
- How might a declining industry in the United States (like the textile industry) entice companies to bring manufacturing jobs back to the US?
Activity
Workplace Safety Case Study – With a group, research a real-world example of workplace safety violations (e.g. garment factories, mining accidents). Write a short report on what happened, how it affected workers, and what could have been done differently.
Additional Resources
- Biscontini, T. (2025) Low-cost Country Sourcing (Cheap Labor). EBSCO. https://www.ebsco.com/research-starters/social-sciences-and-humanities/low-cost-country-sourcing-cheap-labor
- Saravanan, A. (2024, February 26) The Past, Present, and Future of Cheap Labor. Medium. https://medium.com/@asarav/the-past-present-and-future-of-cheap-labor-feec406c4a90
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