Over the past several days I've come across several articles, such as "All talk about job creation" by columnist Boo Chanco that discuss programs and incentives to attract more foreign investments to third world countries like the Philippines (where, as an American expatriate, I happen to reside) and how bringing in such capital and employment opportunities will improve the economy of these nations.
One matter of concern that all these commentaries mention is the cost of doing business including labor expenses in these locales, and how supposedly inflexible minimum wage policies for example can discourage foreign companies that are seeking to expand their international horizons from setting up shop in places that have this kind of worker protection law. The Philippines is one such country.
One proposed solution is to create special economic zones here for foreign companies that would be exempt from these salary restrictions, the logic being that a minimum wage reduces the number of people that a foreign prospective employer is willing to hire, thus leaving many unemployed Filipinos out in the cold who would otherwise be in the labor force. And furthermore, according to this line of reasoning, isn't it better for the unemployed seeking jobs to work for less than minimum wage than for them to have no income at all? However this proposal places the outcome of bidding down labor costs on the backs of the working people who even when paid minimum wage—which itself is a pittance—can barely afford the basics. And under such a plan, nowhere have I seen a suggestion for the government to subsidize the difference between the substandard pay of the "special zone" employer and the minimum wage in that locale. Yet the government has no problem about offering revenue-draining tax holidays to foreign companies to open plants here, but it can't offer a measly subsidy to their workers too?
Moreover, is labor cost the real or even a major reason that more companies from abroad are discouraged from opening their doors or staying in the countries like the Philippines? Actually, there are more onerous factors that drive up the cost of doing business in this country such as expensive electricity, poor infrastructure, and corruption. Yet if the Philippines managed to overcome all these problems, and as a result workers were to become more efficient and to expect higher wages, international businesses here would likely do what they always do when faced with having to pay their workers more: Pick up their operations and chase the lowest wages possible across the globe in a race to the bottom . American workers experienced this phenomenon with the textile industry. Years ago, apparel and linen manufacturers were originally located mainly in New England but then relocated to the Deep South, then to Mexico, and finally, along with major American and European retailers, outsourced their labor needs to contractors and subcontractors in Asia, including the Philippines—and Bangladesh
The garment business in Bangladesh and the recent collapse of a shoddily built factory there that killed hundreds of employees are a logical outcome of this practice. They are a stark reminder of what happens when labor costs are slashed and worker safety standards are ignored with impunity. According to a CNN report, government officials themselves including members of parliament there often own such businesses and as such have no interest in enforcing regulations intended to protect the health and safety of employees or pay them decent salaries. The wage of a garment worker in Bangladesh is $38.00 per month. If the Philippines were to become a major manufacturing hub bolstered by companies from abroad, will this country which already has labor law enforcement issues turn into another Bangladesh for its factory workers?
And finally, I would like to add a word about the current plight of American workers, who have seen jobs, wages, rights and working conditions spiral downward since the Reagan era (which I personally witnessed and experienced prior my retirement), and especially since the Great Recession. The latest assault by the Republicans who have been mainly responsible for this decades-long attack is an attempt to end required overtime pay for employees who labor beyond an 8-hour day or a 40-hour week and require them to take "comp time" instead. The joker in the deck is that it will be the employer, not the worker who decides if and when such time off will be scheduled—if ever.
In short workers who have to put off with inequitable pay, unsafe working conditions leading to death and injury, and deprivation of their labor and human rights when there's less excuse than ever in this supposed modern, progressive era for these conditions to exist in the first place are really no better off than their counterparts of the past who toiled under similar circumstances in less enlightened times. For these people the only thing that's changed after all this time is the calendar.