Sweatshop: Developed Country and Globalization Benefits

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“In Praise of Cheap Labor: Bad Jobs at Bad Wages are better than No Jobs at All”
by Paul Krugman

Costandoi Diana
Salihu Muhammad Rayyan Bello

A. Author’s position

* Globalization brings about rapid developments of countries. While wages and working conditions in the new export industries of the Third World Nations are appalling, they have been big improvement over “the previous, less visible rural poverty”. This can be attributed to the extension of MNC to Third World Nations and job creation.

* Globalization benefits Third World Countries a lot more. The perception is that developed nations use globalization as a means to exploit nations which are under developed. According to the author, globalization benefits under developed nations a lot more than it benefits developed nations. As a result of globalization, in Indonesia, ‘per capita intake has risen from less than 2,100 to more than 2800 calories a day. Improvement can also be seen in country like Bangladesh. Globalization creates jobs, and jobs pay people to eat.

* Cheap labor is a strategic advantage for third world nations: Lower wages permits third world nations to compete in the global market. In the 70th the cheap labor wasn’t enough to allow a developing country to compete in world market for manufactured goods. The major determinant then were the advance technology, knowledge, innovation, market size, political stability etc of developed nations. But after a while, due to some factors such: low tariffs barriers, improved communications, cheap air transportation, reduced the advantages of producing in developing countries. Low wages allows developing countries to break into world markets. Hence nowadays, a country with cheap labor is usually more attractive to MNCs (most especially manufacturing based). The cheap labor aspect became a strategic advantage Third World Nations have over other countries. By attracting these MNCs, this aids rapid growth and...
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