Ethics behind Cheap Wages in Underdeveloped Nations



A bird in hand is worth the two in the bush. United States companies are continuing to relocate factories to undeveloped countries and barely pay employees enough to live on. This is purely ethical; in fact, it is a favor that these companies are doing to these workers. Human right watch might have different views and criticize this act as unethical and inhuman. I beg to disagree with them because, apart from looking at it in the narrow perspective of salary molestation, there are other mutual benefits that accrue. Abraham Maslow in his theory, the hierarchy of needs clearly states that human beings strive to achieve the apex of the hierarchy and becomeself-actualizedonly if physiological needs are satisfied(Baja&Relents, 2010). These physiological needs include food, shelter, clothing, education, parenting just to mention but few. Same case applies to this scenario.

The idea of setting up US factories in underdeveloped countries, positively results into creation of job opportunities to the jobless local people. Although the initial objectives of setting up these companies could be an effort to significantly reduce production costs, benefits that accrue are directly consumed by the same jobless local people. This changes lots of things. Local people will be employed in those factories. This makes the start of eradicating poverty cause by joblessness (Hillier & Chasseur, 2012).

For any government to run its affairs well, it must have funds to control the state. The set up factories creates new big source of revenue to the government of the day. The money collected through tax will enable the government provide services to its people, for example, provision of medical services, education and security. Therefore, these companies’ profit margins may come at an expense to others despite paying little wages to its workers (Hillier & Chasseur, 2012).

Apart from little wages for its workers, these factories create market opportunities for local goods and resources. Forexample, if tea factory is set up in an underdeveloped country that grows tea, farmers will have market where they can sell their products. Factory workers too will have a place to sell their products. This creates mutual benefits between the two parties apart from just basing emphasis on small wages that barely support their lives.

I believe that education is the strongest tool that one can use to change the whole world. Paying workers low salaries seems unethical but, the children of those workers will benefit from scholarships and other sponsors offered by the companies. Schools and developments in the village will uproot like mushrooms. Electrification will soon follow suit. When all this developments start happening, the whole issue about low wages that barely support their living will not be the issue to complain about. Many will learn how to make their own money and invest in businesses. Loans will be other beneficial factors that will see workers invest and star business.

Innovators will come up with their own business ideas around the factory. Setting up new factories in place will definitely prompt innovators to come up with subsequent business to earn a living. This creates self-employment to the unemployed due to created opportunities (Maunders, Plasma & Ricks, 2011). For example, energetic innovators will open shops,restaurants, recycling firms among other activities. This is very beneficial to the whole society rather than few individuals.


Better half a loaf than none, although the relocated US factories to underdeveloped countries pay little wages to it workers that barely can support them, it is good to view the benefits that accrue from the set up rather than only focusing on the few seasonal problems. From source of employment, source of revenue,sponsorship,developments to innovations, it is clear that these factories are doing great favors to both the workers and the entire nation.


Baja&Relents, 2010, p.47-53, Capital and the Dept Trap: Learning from Cooperatives in the

Global Crisis, (3rd Ed.), Boston, Jute & Sons Inc

Hillier & Chasseur, 2012, p.30, Growing Income Inequalities: Economic Analysis,

(2nd Ed.), New York, John Wiley & Company Ltd.

Maunders, Plasma &Ricks, 2011, p.73-75, The Minimum Wages, Low Pay and Unemployment:

Applied Econometric Series, (4th Ed.), Chicago, McGrew Hill

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