It’s become pretty normalised for businesses in higher GDP economies to outsource work to less developed countries. It’s often considered an almost primary option for reducing business costs. But can we really call this kind of business ethical?
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Is outsourcing cheap labor ethical?
In this video, I want to discuss the ethics of outsourcing work to countries that have weaker economies so that you can pay them less.
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Outsourcing Marketing is Normal, Right?
So, it’s pretty normal in today’s society that a company in somewhere like the UK or the US or Australia, they outsource some of their simpler tasks to countries like India or Philippines or Indonesia. And it seems reasonable because you can pay them less and you’re supporting a country that has a desperate need for work.
Now let’s talk a little bit about the ethics of this though.
Is Outsourcing Really Supporting Other Economies?
Are you really supporting the country that is desperate for labour or are you exploiting people who are desperate for work?
I think the key point here is are you paying the minimum wage in the country where you’re earning money? Because ultimately if you are paying someone less than the minimum wage in the country where you’re earning money, then you’re paying them less than you are legally obligated to in your country. To me that sounds like exploitation.
Disclaimer: I’m Not An Economist!
Now, I realise that there are loads and loads and loads of complexities around this, and economics is definitely not my expertise, so I would love to hear from you if you are an expert in economics and you have an alternative viewpoint on how this is genuinely beneficial.
But if you are a business owner and you are thinking about hiring someone in a foreign country because it’s cheaper – and your primary motivation is that it’s cheaper – then I would really stop and consider whether you are acting within the ethical boundaries that you set for yourself as a business owner.