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Why is cheap labour inethical?

I've got a 15 mark question to answer for my A level Business studies homework. It's

'Nestle may decide to set up a new factory in India, partly to enjoy the benefits of factory wage rates that are as low as 25p per hour. To what extent could this be said to be unethical?'

For this I obviously have to state why cheap labour is so bad. I know that it's unethical but I'm just not sure how to explain why. Could anyone give me some reasons that I could write?

:smile:
Reply 1
Do you mean unethical?

I can't answer your question specifically but bear in mind, Nestle is probably the worst company you will every come across.
I mean some of the atrocities committed by them make some dictatorships look good.
Reply 2
Original post by star10159
Do you mean unethical?

I can't answer your question specifically but bear in mind, Nestle is probably the worst company you will every come across.
I mean some of the atrocities committed by them make some dictatorships look good.

Wooops yes I meant unethical- typo! I was wondering what some reasons cheap labour is bad, that are just general reasons (not specifically related to nestle)
Reply 3
I think labour below the living wage is unethical, cheap labour isn't necessarily.
Essentially, it's exploiting people who need an income, and will do any kind of work for any hours so they can just manage to support themselves, whilst the company makes greater profit margins. Nestle could afford higher wages in India, or possibly even minimum wage in a developed country, but instead they are cutting costs.
However, they are providing paid work, so it could be argued the workers are better off being exploited in this way than they would be if the factory didn't exist. Of course, then there's the fact that they can afford to pay higher wages - which is where you could look at the living wage and see how good/bad a deal 25p per hour actually is.
Reply 4
Original post by Katie_p
I think labour below the living wage is unethical, cheap labour isn't necessarily.
Essentially, it's exploiting people who need an income, and will do any kind of work for any hours so they can just manage to support themselves, whilst the company makes greater profit margins. Nestle could afford higher wages in India, or possibly even minimum wage in a developed country, but instead they are cutting costs.
However, they are providing paid work, so it could be argued the workers are better off being exploited in this way than they would be if the factory didn't exist. Of course, then there's the fact that they can afford to pay higher wages - which is where you could look at the living wage and see how good/bad a deal 25p per hour actually is.

Thank you, this is exactly the help I needed!
Original post by Katie_p
I think labour below the living wage is unethical, cheap labour isn't necessarily.
Essentially, it's exploiting people who need an income, and will do any kind of work for any hours so they can just manage to support themselves, whilst the company makes greater profit margins. Nestle could afford higher wages in India, or possibly even minimum wage in a developed country, but instead they are cutting costs.
However, they are providing paid work, so it could be argued the workers are better off being exploited in this way than they would be if the factory didn't exist. Of course, then there's the fact that they can afford to pay higher wages - which is where you could look at the living wage and see how good/bad a deal 25p per hour actually is.


Original post by RachelMarie
Thank you, this is exactly the help I needed!


I think Katie's made very fair points and pretty much answered your question - I might be too late but it's worth noting that we need to look at things in context. Don't answer your question based on minimum wage being £6 odds in this country - how does 25p per hour fair in India? If it's equal to or above minimum wage there - is it unethical? Of course, just because it's the norm doesn't make it right - but you could use an ethical decision tree (see Velasquez 1983) to help determine if it's an unethical decision.

If I am too late, then remember this for next time! As trees like this make you think twice about what's ethical and what isn't - some people are more emotional than others! :P

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