To start off, I'm a business owner, and I've typically looked at labor from a purely human capital perspective, as an input that goes into the cost of my widget production. That companies had a fiduciary responsibility to their shareholders, and that's pretty much it. It wasn't until I read Rerum Novarum and Centissimus Annus a few years ago where my views started to change.
The current Pope Francis, has a record for being a bit harsh on consumerism (which is appropriate I feel), which leaks over into free market capitalism (which I don't feel is fair). The Pope is admittedly not an economist, and I think does a bit of a disservice to Catholic businessmen when he gives blanket statements bereft of nuance.
With that being said, I've been struggling with the idea of sweatshops and companies outsourcing labor to low paying, low overhead, low safety countries; and of high-end luxury goods.
I understand that the people in these countries really have no other options; and that any sort of pay, regardless of how backbreaking or how dangerous must be worthwhile to them; or the positions would go unfilled. I understand that. However, I also understand that in some cases that they are able to improve the pay and the conditions of these areas without severely impacting their profit; which would enormously benefit their workforce. Then you have the argument that the pay that is being given to these people which is above market rate could be used to further invest in other areas, or give bonus to executive employees, etc etc and around and around we go. You've also less efficient which may allow your competition to undercut your prices, but outsourcing and paying market rates. You go out of business, all your employees are fired.
As an example, If I roll up to a starving laborer in 1 of my 4 Escalades ( I drive a Tundra, this is just an example), and absolutely beat him down to the lowest possible rate for which he'll cut my lawn, literally the penny to which the scale tips his marginal utility to positive, you wouldn't say I'm a shrewd businessman; I'm an *******. "Throw the guy a $20 why don't you" most people would say, and I think they'd be right. Sure, I'm paying over the clearing price for labor when I don't have to, money that I could theoretically be using to purchase goods or other laborers; but it still seems assholish, whether that matters or not.
Now take my 4 escalades, if instead of buying these Escalades, I buy 1 used Kia, and donate the rest to buy food for the hungry, what have I done? Yes, I've fed the hungry; but those Escalades also filled the pockets of the Salesmen at the Car Dealership; the Dealership itself, the assembly line crew, the design engineers and so on and so on. The escalades will need regular maintenance and gas and servicing etc, which will also go to create jobs.
Where do you strike the balance?
The current Pope Francis, has a record for being a bit harsh on consumerism (which is appropriate I feel), which leaks over into free market capitalism (which I don't feel is fair). The Pope is admittedly not an economist, and I think does a bit of a disservice to Catholic businessmen when he gives blanket statements bereft of nuance.
With that being said, I've been struggling with the idea of sweatshops and companies outsourcing labor to low paying, low overhead, low safety countries; and of high-end luxury goods.
I understand that the people in these countries really have no other options; and that any sort of pay, regardless of how backbreaking or how dangerous must be worthwhile to them; or the positions would go unfilled. I understand that. However, I also understand that in some cases that they are able to improve the pay and the conditions of these areas without severely impacting their profit; which would enormously benefit their workforce. Then you have the argument that the pay that is being given to these people which is above market rate could be used to further invest in other areas, or give bonus to executive employees, etc etc and around and around we go. You've also less efficient which may allow your competition to undercut your prices, but outsourcing and paying market rates. You go out of business, all your employees are fired.
As an example, If I roll up to a starving laborer in 1 of my 4 Escalades ( I drive a Tundra, this is just an example), and absolutely beat him down to the lowest possible rate for which he'll cut my lawn, literally the penny to which the scale tips his marginal utility to positive, you wouldn't say I'm a shrewd businessman; I'm an *******. "Throw the guy a $20 why don't you" most people would say, and I think they'd be right. Sure, I'm paying over the clearing price for labor when I don't have to, money that I could theoretically be using to purchase goods or other laborers; but it still seems assholish, whether that matters or not.
Now take my 4 escalades, if instead of buying these Escalades, I buy 1 used Kia, and donate the rest to buy food for the hungry, what have I done? Yes, I've fed the hungry; but those Escalades also filled the pockets of the Salesmen at the Car Dealership; the Dealership itself, the assembly line crew, the design engineers and so on and so on. The escalades will need regular maintenance and gas and servicing etc, which will also go to create jobs.
Where do you strike the balance?