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Jah Kable

Thinker ready to be unleashed upon the world,

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Why is it OK for corporations to outsource work to countries that violate the corporation's home country labor laws?

Prime Example: Nike and Apple. Paying about 15 bucks a day to KIDS in other countries making their products so they can sell them for a major mark up everywhere. Now If they can make these products for a total of like 5 bucks, why do we pay 100-500 bucks for these things? This just seems greedy to me And seems like it could be a legitimate reason for the recession. GRRRR this is frustrating. They are hoarding so much money they couldn't possibly spend it. Letting this happen is madness. Yet not doing or saying anything is the standard "accepted" action. Like a friend told me "We don't need a revolution because that implies returning to a broken point in the cycle, We need an evolution." Yeah he blew my mind too. :D Keep it clean and friendly everyone. Looking forward to your ideas. Lets get this some traction and change the world.

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  • Aug 6 2013: I am an insider to outsourcing. I am working in service sector. I’ll try to correlate the scenario from my Industry’s point of view. Consider a scenario where all the Jobs/industries/services are present locally. Means we are not exporting or importing anything from outside. Now consider following outcomes derived from this condition.
    • The cost of same job done in developed world (US/ Western Europe) is approximately 6-7 times (if not more) than the same job done in third world country.
    • Raw material/ resources taken out of these third world countries are at very very low prices (may be 10-15 times cheaper. Don’t get shocked, it is reality).
    • Now If product and services are done locally, cost will increase with same ratio as the cost of labor and raw material. Say cost will increase around 8 times of current cost of importing things/services from third world countries.
    • Sellers cannot increase price by 8 times so they have to sell things at competitive prices. So lets assume they’ll increase the cost of goods by 4 times and reduce their profit margins by 4 times.
    • Now things are costlier by 4 times and profit margin of corporations is decreased by 4 times and salary of workers are as it is currently. (if corporation are not reducing salaries to increase their profit).
    • As cost are increased and profit margin of corporations is decreased, the tax paid to govt will be decreased by 4-6 percent. Say 5 percent.
    • Now assume that currently cost of living is divided into two halves 1.Services/goods currenty produced locally (house/medical/someproducts) and 2. Services/goods imported (most of stuff we buy from super market, services which include software / back office jobs including customer care or tech support :) ).
    • Say these two portions are 50-50%. Local stuff remains at same price but cost of other half will increase by 4 times. Therefore total cost of living will be increased by 2.5 times.

    contd..
    • Aug 9 2013: Let me get this straight, you are saying that manufacturing abroad can increase the corporations profit by 400% and/or reduce the cost of the item. This will significantly increase corporate tax revenue in this country.

      Yet many others are complaining that these corporations are using overseas shell companies to hide profits so that they pay 0% in taxes. How is it that companies that sell billions of dollars of goods imported from overseas to the US pay 0% tax revenue. And, if that is the case then isn't the logical thing to do to put a stop to this practice?

      According to your logic we should support this practice because we will get more tax revenue. If the premise is false the conclusion is false.

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