Thursday, May 29, 2008

Exploitation of poor workers is more about poor treatment than low wages

The exploitation of labour in poor countries is a horrible thing.

Companies shouldn't treat workers poorly, they shouldn't make them work in dangerous conditions or harass them, to mention only some of the misdeeds.

But what about low wages? People usually think that giving low-wage jobs to people in poor countries is exploitation. But I think that if companies treated workers properly (with safe working conditions, etc) but still payed the low wages, it wouldn't be exploitation.

As far as I can tell, low-wages is not the negative for the workers that most people think it is.


A normal auction is aligned to the desires of the buyers and sellers. The buyer wants to get as much money as they can, and the potential buyer who wants the item the most gets it because they will pay the most for it.

With the types of work that goes to poor countries, the situation is similar. The company wants the work done as cheaply as possible, and -- this is the crucial bit -- the people who want work the most get it because they are willing to do it for the smallest amount -- the lowest pay.

The pay rate that the most desparate people are willing to do the job for is too low for all the other people, who don't have as great a need for those jobs. For these other people, the minimum amount that it's worth their while to do the job for is a higher rate of pay. So if the company was to pay more for the jobs, there'd be a larger pool of people who'd be willing to do it. And more than likely, some or all of those most desparate to do the work would miss out.

I hope you agree that that would be a bad thing.

But why do companies have to get the work done as cheaply as possible? Could't they pay higher wages, but still give the jobs to those who are most desparate for it? It would be great if you could find a way for this to work in practice, though I doubt there is one.

Sure, some companies could afford to do it, but most would end up being put out of business by compeditors who found other people who were willing to work for low wages. These compeidtors would thus be able to sell their products at a cheaper price, and would end up winning out in the marketplace. There are definiely more subtlties than this, but I don't think anything else can really override this basic reality.


  1. aye, agree.
    but want to make the point that labor need not be market driven - that is only a basic reality in a capitalist social model.
    i feel like it is virtually impossible for me to think outside of this because it is too much a part of my experience of life, but logic tells me this need not be the case. (the abstraction of value into currency is a clever trick that we can do with our big brains, but not a prerequisite to quality living).
    don't know if what i'm saying makes much sense - this post provoked an emotional response in me and I wanted to say something. this world is abundant and can provide for all - the way the wealth is divided is so unjust - we shouldn't accept such uneven distribution of wealth (and such disparate quality-of-life conditions) as a "basic reality" - it is not.

  2. Hi Kris,

    I agree that it's not the only option. But are any of the other options practical? I'm not convinced there's any other alternative that'll work better in practice.

    I definitely agree we shouldn't just accept things as a "basic reality", and agree we should be looking at how we can improve those people's lot.

    Regarding the distribution of wealth -- I'm interested in understanding more about what potential options are there and how they'd work. I don't know if anyone has written a book about that kind of thing?