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The True Cost Of Cheap Labor

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Cheap labor is a very economic and political problem across the world, mainly in the United States of America. The main concern when it comes to cheap labor in America are immigrants that come here to have a better life are having to work harder than normal Americans do and still get paid less due to being immigrants. When people come to America, it is like starting over, having to rebuild everything over again. Once a person mentions that they came over from a different country, typically the employer will take advantage of that person because have little to no knowledge about living the “American Dream”. The employer makes that person work all hours of the day but pay them very little. They must risk spending time with their family, let alone have time themselves to make sure they are paying bills, putting food on the table, clothing themselves due to not getting the average pay a normal person would normally receive.

Theory Foundations

Most immigrants migrate to New York due to it having many opportunities for them once they arrive in America. The price of cheap labor and how immigrants or illegal citizens must work in order to make money, specifically in New York. An example of cheap labor that happens in New York is that manicurist is required to pay a $100-$200 startup fee just to work and then after proving themselves, they may begin to receive wages/tips starting at $3 (Lowry 2015). With this, immigrants find themselves living in overcrowded apartments with others.

There is some economic growth going from the fact that many women go to nail salons and not knowing the true definition or cost of cheap labor (Lowry 2015). Many women and men walk in and out of nail salons daily and only get to see these workers from an outside view and not the real true working conditions. The tips people are giving their nail techs are not going to them. Workers in the nail salon are being withheld from their money (Lowry 2015). These workers are living in overcrowded apartments because they are not receiving the amount of money they really should be receiving (Lowry 2015). For that reason, they must sacrifice privacy and not being able to get good rest due to the apartment being overcrowded. No room for beds and if there is, they would let the children if any sleep on the beds while everybody else sleeps on the floors. Cheap labor is affecting these people mentally and physically.

Majority of the workers in sweatshops are undocumented Latinos and Koreans and their wages vary from $3 to $7 an hour for 10-hour days (Kitroeff and Kim 2017). On average, a worker will create 600-700 pieces a day equating to more than $40,000 for stores (Kitroeff and Kim 2017). With workers receiving the wages that they do, it’ll take them almost two years of saving to make that yet, stores are making it in one day consistently. Unfortunately, as Forever 21 and other retailers continue to profit from this system, this problem will continue. One lady, Norma Ulloa, works for Forever 21 and she spends about 12 hours a day just putting price tags on their products and make sure they are sellable products for a wage of $6 an hour, which is significantly under minimum wage (Kitroeff and Kim 2017). That is about $72 a day before taxes. Barely enough for a person to have extra money in their pocket because they must make sure all their priorities are handled first if they have enough to cover those expenses.

Government Foundations

The main members of the labor market and how the political economy of advanced democracies explains how immigrants work in poor brutal environments when working but getting paid little to no money (King 2008). Mostly, these jobs are quoted to be nonstandard cheap labor jobs that are temporary jobs and low cost, while most regular jobs are called “standard jobs”. Governments are promoting cheap labor only because it can save more money (King 2008). They strongly promote these jobs to immigrants due to assuming most immigrants have no knowledge and so on. Due to them assuming most have no knowledge the government only feels obligated to pay them less.

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Illegal Status, More Skilled

Most immigrants are illegal but when it comes to cheap labor, they are the ones who are most educated when it comes to jobs because they are always categorized in nonstandard cheap labor and not having the opportunity to move up to a higher title. Their jobs are always temporary so they would just have to move onto the next job to keep providing for family and/or themselves. This problem provides a framework to give an idea about political economy of cheap labor (King 2008). Cheap labor plays a big role when it comes to the political economy of industrialized nations. The government tries to think about how they can save more money. People who already have a great job that pays well won’t really get affected greatly if the government were to cut wages back. The people who are categorized in “nonstandard cheap labor” will be affected greatly because they only have about a 20-50% in survival of this world, let alone living in America (King 2008).

Not only does cheap labor greatly affects the US but it affects major factoring countries such as China. China and how their prices to trade and partner with them aren’t as cheap as they used to be. The main reason for this is the Chinese economy is expanding at great rates. The wages are up 64% from 2011 to $3.60 which are way higher than the wages in India and South Africa (Yan 2017). A lot of trade partners are investing in robots to do the tasks and shopping with other countries or Sri Lanka where the wage is only $0.50 (Yan 2017). Unemployment remains a concern with the robots.

We can be so cheap that we will pass up good trade partners, for cheaper ones just for the cost. China has proven themselves as a great trading partner with the U.S. and they deserve the wages they are charging (Yan 2017). The issue of how cheap labor is no longer cheap for businesses anymore. Businesses have started finding loopholes to save more money because they are starting to realize the cost of labor (Yan 2017). They feel if they hire better people they will save money because they will already be skilled and won’t require much training. The problem comes when people begin to up and leave companies, forcing them to hire more people, thus spending more money on training and skills (Yan 2017). There are hard direct costs and soft costs that really hurt the company. This is beginning to cost the company’s profit and productivity.

Cheap Labor Outside of United States

The working conditions in America’s top profitable company is not what people would accept. Apple’s factory is in China which by trade name known as Foxconn. Back in 2009, it was reported that there were about 99 million factory workers since the first iPhone shipped in 2007 (Merchant 2017). The working conditions are not workable at any reason. Even though this factory is outside of America, it is not okay for those workers to work under the conditions they work in also not being paid on average.

Due to the working conditions, workers started to commit suicide and becoming depressed (Merchant 2017). They work hard and long hours to barely get regular pay. They are working for one of America’s biggest companies and yet are experiencing cheap labor and crucial work environments that are making workers end their life. They consider workers killing themselves a normal thing. Something should be done about this situation because at the end of the day these workers and factories are still working for America. They are building Apple products specifically the iPhone in China to send right back to the United States. They work long hours of the day and get paid so little for one of the top companies here in the United States and yet they are the ones committing suicide, ending their lives because they can pay for their expenses, being homeless and this factory job is the last hope that they have in their life.

Conclusion

Overall, cheap labor needs to end. 2020 is approaching and most immigrants here are getting paid very little to no money. Obviously, most immigrants are here on green cards or visas and some are here illegally but because they came to the United States from a different country, they get treated as if they do not have no knowledge or don’t know what is really going on. These are still humans and have a right. They have a right to be paid an average American is getting paid at that employer, especially in factories. Factories pay less but require the most work. These people still have a life. They still have responsibilities and a family that are depending on them but how can they do that if they are getting paid way below the average minimum wage and only make about $250 a week. Cheap labor will always continue to be a problem in the U.S., yet nothing has changed. We are entering the future and now companies are testing robot’s ability to do the workers’ jobs which will only make cheap labor even a bigger problem.

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The True Cost Of Cheap Labor. (2022, February 18). Edubirdie. Retrieved November 27, 2022, from https://edubirdie.com/examples/the-true-cost-of-cheap-labor/
“The True Cost Of Cheap Labor.” Edubirdie, 18 Feb. 2022, edubirdie.com/examples/the-true-cost-of-cheap-labor/
The True Cost Of Cheap Labor. [online]. Available at: <https://edubirdie.com/examples/the-true-cost-of-cheap-labor/> [Accessed 27 Nov. 2022].
The True Cost Of Cheap Labor [Internet]. Edubirdie. 2022 Feb 18 [cited 2022 Nov 27]. Available from: https://edubirdie.com/examples/the-true-cost-of-cheap-labor/
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