What are some of the economic reasons why some firms choose to relocate some of their productive facilities to foreign countries
OPTION 1 – Sweatshops
There has been much talk in recent time about outsourcing and “sweatshops.” Outsourcing is usually defined as occurring when a company chooses to export some of its production to foreign countries. Jobs in which foreign workers work in “sub-standard” conditions and are paid lower wages (than their American counterparts) are typically referred to as “sweatshops.”
What are some of the economic reasons why some firms choose to relocate some of their productive facilities to foreign countries?
With regards to low- and high-skill laborers, which domestic (American) workers may gain from outsourcing, and which domestic workers might lose? Why is this the case?
With respect to the types of products produced by companies that outsource, what effect may outsourcing have on domestic prices of these products?
If the US government wanted to reduce outsourcing, what changes in policy could it make to do so?
Please watch the following 2 videos regarding “sweatshops.”
Inside Look at Apple’s Chinese Sweatshops!
After watching the videos, please tell me if “sweatshops” are a good or bad thing for foreign workers? WHY?
OPTION 2 – Worker-Owned Businesses
Some politicians have recently proposed ideas that would encourage or require more businesses to operate as “co-ops” or “worker-owned” businesses. In such businesses, the workers and the bosses get paid the same amount of money and have an equal say in the management of the business.
Do you believe that more businesses should be run in such a manner, as cooperatives in which the owner and employees make roughly the same amount of money?
What are the potential drawbacks to the owners of such an idea? What about drawbacks to the workers?
If you like the idea of “worker-owned” businesses, should the government require businesses to operate in such a manner? Why or why not?
Why do you think some politicians may want to pass laws that would require more businesses to become cooperatives?
Please watch the following two videos and answer the following questions.
Capitalism: A Love Story – Workplace Democracy and Cooperatives
Which of these two videos makes the most sensible economic conclusions? WHY? Be specific.
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