Why outsourcing work to poor countries hurts everyone


The Qatari government has found itself in the spotlight for the exploitation of cheap migrant labour. But western corporations are as much to blame as governments; it is those corporations who must now pay outsourced foreign workers a “global living wage.”

Civilizations have been exploiting cheap and, many times, free labour for thousands of years — whether it be the Egyptians or Great Britain, they all did it!

Despite it being less blatant and better hidden than it was in the past, the workforce of developing nations are still being exploited today, whether people would like to believe it or not. It can be found in many forms, from forced labour, unlawful recruitment, all the way to child labour and even sex trafficking. But what tends to go under the radar is a more subtle form of slavery and the significant impact it has on countries — cheap overseas labour.

So what is it and why does it exist in our modern world?

Businesses in our corporatized and capitalistic-centric society have become so obsessed with turning a profit, that they have chosen to outsource their work to qualified individuals from developing nations, but at a greatly reduced cost.

Why at a reduced cost? Firstly, because the standard of living in those countries they are outsourcing from is considerably lower and secondly, as a result of the belief that employees from these countries are only worth the value based on where they are born, located and their economic/environmental circumstances.

Businesses are not paying them the same as equally qualified people from their own countries. This is not right. Mexico, for example, has a literacy rate of 94 per cent and 130,000 engineers and technicians who graduate annually — who are paid $1,440 monthly on average. This is in stark contrast to in the U.S., where they are paid $3,500. These big businesses are therefore able to utilize the high-quality service these individuals can provide, while paying them just enough to survive. This is rubbish and has to stop.

So what impact does underpaying outsourced employees have on the countries they come from?

Well, as a result of being paid just enough to survive, the outsourced workforce is unable to invest their leftover income back into their economies appropriately. This means that the demand for goods and services, as well as the supply, diminishes.

People are no longer motivated to get educated, in order to uplift themselves out of poverty, because they feel imprisoned by a system being enforced upon them where they are valued based on where they are born and live.

If we take it a step further we see that these inequalities in pay are causing already educated individuals to leave their countries for higher paying jobs abroad. More than half of young Africans consider emigrating to other continents, citing “economic hardship and the lack of educational opportunities” How on earth are we supposed to build the economies of the Third World with an uneducated population?

Some might argue that foreign aid to the governments of developing nations is the antidote to their declining economical and societal health. Individuals such as Angus Deaton, winner of the 2015 Nobel Prize in Economics, state otherwise. He argues that foreign aid is actually corrupting Third World governments and slowing their growth. Is it not obvious?

Corporations need to realize they have the social responsibility needed to expand the economic development of the countries they are sourcing from. They need to pay their outsourced employees more, so they are able to build their countries from the ground up instead of from the top down. Corporations dominate the economies of the world and we need to make them responsible for building them.

Amy-Renee Hovorka is the founder of Procurement Marketplace, a marketplace that connects procurement projects with professionals.

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