The use of cheap labor raises a variety of moral and ethical problems, and none of them are simply answered. Because workers are the foundation of every civilization and play a significant role in the production process, using cheap labor is a quick and efficient way to boost profits.
What drives a corporation to use low-cost labor?
- Thread starter Shavkat
- Start date
The drive to lower the cost of production to the barest minimum. That's why Chinese products are cheap. Cheap labour, cheap cost of production, cheap cost of final good.
The main reason of companies hiring cheap labor is cost reduction. In doing so, they can lower the price of their goods in the market and attract more customers to buy. This is a way to maximize profits.
Low cost labour is a cost reduction strategy. The challenge is that it might not be as efficient as quality manpower. It should be used for only menial routines.
Though low cost labor can bring a lot of profit to the business but it can as well have some disadvantages to the business as it can reduce the quality of product which can make the sales limited
It is better to use low cost labour for only job routines that doesn't have anything to do with critical of thinking. Anything beyond that, you are taking a huge gamble.
- Thread starter
- #9
I do agree that they can save more time and energy. In my view, they can also avail automated machines and replace the laborers working with them. In this way, they do not need to deal with low labor cost issues.
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I do agree that it will be a gamble if they cannot go for the low labor cost thing. I am sure that the laborers would complain about it once having the first pay out. It is always a headache for the company's management.
There are actually various reasons though, in most cases it could be that the business owner is simply cheap and stingy hence he does not want to spend too much. In other cases it could also be that the business is having financial issues at the moment.
Using cheaper labour that produces inferior results would ultimately be the death of any enterprise. It would be best instead to negotiate with the best labour available for lower wages and possibly, more benefits as compensation
