Thursday, March 3, 2011
Its a Big Business World
Just a little background information before I ask questions, I am a business major with a concentration in finance. I currently own a few shares in Pacsun and Citi Group Insurance. These businesses, along with all publicly traded companies, make A LOT of money. Jeans at Pacsun go for about $40 a pair. If a little research was done, they are produced for something around $5 dollars in places like Taiwan. It almost makes me angry to support a company that is making between 400 and 600% in profits. So some questions that I have are, should companies be allowed to make as much money as they like, if no, where should a limit be drawn since we live in a capitalist society. Should we stop buying or is paying that much alright? Can we fight the system for a change in price or is it a helpless situation?
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I believe that companies, if they outsource to other countries, they should pay their workers descent money, or at least more than they pay them in present day. The profiting should be on both ends, it is the humane thing to do. People run companies and make money over here, but then they profit off the work of others making significantly less then them and, although I know that equality will never happen between paying workers and owners, I believe that the percent difference should be lessened between the percent of profits and percent paid to the workers for the companies.
I feel like we should either not pay that much for clothing, or at least more of that money should pay those who manufactured it.
In order to fix this situation we would need to make these companies known as to what they're doing, but most people are too set in their ways to change their habits. Look at recycling, this has been going on for a long time and I still know a lot of people who don't recycle at all (for example my roommate, I constantly have to remind her to put different things in the recycling and constantly have to take things she's thrown away out of the trash).
Although it might be morally wrong, taking advantage of labour laws in foreign countries really is just smart business. Although the United States loses many jobs every year to cheaper overseas nations, we are only losing jobs such as manufacturing which most Americans do not want. It is the same situation with illegal immigrants. They enter the country and take the jobs that the rest of us think we are too good for. Also, many of these jobs go to countries such as China and India where there are about 2 billion people who need jobs. Without these jobs, many people in developing nations would be jobless and these countries would be much less industrialized. Sure the conditions could be better for workers, but in poorer countries, a dollar goes much further.
If we fight for lower prices, then it will not harm the business, it will hurt the men, women, and children who work in the Far Eastern factories. If prices go down here, then undoubtedly wages will go down for factory workers in countries where labour is cheap and uncontrolled.
I don't think there is anything we can really do to stop this. Creating bad publicity or putting a spotlight on these companies could work, but the better paid and treated workers are, the more expensive your jeans become. I don't think its fair to ask for cheaper products and higher wages for workers. Its one or the other. Also, we live in a capitalist country where businesses are largely unregulated by the government and the cheap labour sources are in other countries where the United States really has no jurisdiction.
I am not supporting these business practices, but you cannot deny that they are helping to make the United States a richer country. These companies make such huge profits to make the shareholders happy. Increasing wages for factory workers would decrease the company's profit which would then upset the shareholders, and then the company goes bust. The best thing we could do would be to persuade these companies to invest some of their profits into the developing world to help bring the quality of life for workers up to reasonable standards.
I think that companies should be allowed to make as much money as they like IF they are conducting their business in a humane and proper fashion. If they are paying their workers in a foreign country under minimum wage or outrageously overpricing their merchandise, there should be a limit placed on their business. The limit is dependant on the company, but I think that it should just be reasonable to where the company is making a good profit, workers are being fairly paid for their work and consumers are paying fair prices on the quality of merchandise that they are purchasing.
I think it would be ideal to stop purchasing from these companies, however, it is not a reasonable or very plausible response. It would entail a great amount of people for these companies to even feel the loses. For example, most people have issues with how Walmart runs their business and I always hear people saying that they are not going to support them and shop their anymore. Yet, most Americans continue to shop at Walmart because of the convenience, good prices, etc. To stop taking our business to one of these companies would a good way to question authority, however, the chance that we'll see a change or have any majoy affect on how the company runs their business is very slight... if any.
I think that it would be extremely difficult and unpopular at the least to attempt to place regulations or restrictions on the percent profit that companies are allowed to make, especially because of the fact that we live in a capitalistic society. I definitely don't think that it is right for the companies to be taking advantage of people who don't have much choice but to work for whatever price the company will give just to widen their profit margins, but I think that it would take huge actions from the government or massive amounts of people to make any impact at all on the companies. I think that is the government's job (and the people's job to make them) to ensure that businesses are acting in a correct way (respecting human rights and the like) to the greatest degree they are capable of doing so. However, I'm not sure how much power the government really has if they are doing things overseas. I think it is a difficult question because there are so many big players with huge amounts of influence and money to make things happen (or not happen) even within our own system of government.
I think, realistically, it would be impossible, in our capitalistic society, to place a limit on the amount of profits a company is allowed to make. Frankly, I think the idea goes against the ideas of capitalism. I mean, the goal of most companies is to make as much profit as possible. That is not to say that there isn't a moral or ethic dilemma, there is, but as long as these companies don't overtly break any U.S laws, it is not likely that these practices will change.
I think if you disagree with a companies business practices, than don't do business there. Granted it would take a lot of people to make any difference, and a lot of people prefer the convenience these stores provide, but its a start. Also, short of changing labor laws in other countries, there is little else I can think of to stop these business practices.
I agree with Christian's post. Companies should be allowed to make as much money as they like if they are conducting business in a humane way that is not harmful to others. Workers should be paid at least minimum wage and nothing less. If they break this, the company should somehow be penalized. Businesses should aim to be fair in pricing of merchandise and how much employees are paid. If a company is turning a 600% profit, obviously the company has enough to pay its employees and possibly provide benefits to them as well.
It is a nice thought to "teach these companies a lesson" and stop buying merchandise, but it is not realistic. I mean how many of us have received the texts and emails about not buying gas on a certain day to send a message to oil companies and it has always failed. Boycotting large corporations that provide us the necessities in our lives has never happened before and I don't think it stands much of a chance to.
There is a really valid reason to why the United States is outsourcing jobs. It's cheap! I'm not saying to morally right, but as long as it saves companies money, they will do whatever they can to see that it continues. Living in a capitalist society, I think it would be impossible to regulate profits on a corporation. This would undermine our history of freedom of business. What the average consumer can do is only support the businesses that they feel are fairly treating their workers and consumers.
I don't think there is a problem with how much we are paying for products. Since America runs on a free market, there are plenty of places for consumers to find products that are in their price range. However, I do think that the workers overseas are highly underpaid and suffer harsh working conditions. Unfortunately, the humane thing to do and the goals of a capitalist society do not have any common ground. When you take it for what it is, capitalism is a very selfish concept. The point is to make as much money as you can by whatever means. Since America is a very individualistic society, capitalism works well here. Also, many of the places that jobs are outsourced to are more collectivistic cultures: the main concern of the people there is their loved ones, and they will do whatever they can to support them, no matter how low their wages are.
I don't think the way the system works is fair, but it works for a reason and I don't see a drastic change coming about in the near future.
I entirely disagree with supporting companies that make things in economically weak countries and then sell it for a huge profit in economically strong countries, however, realistically speaking I am guilty of knowingly doing so. While I certainly know a lot about the companies that find easy-outs and reap the benefits, as a college student it is nearly impossible to avoid those lower price tickets that come from a lack of employment regulation and proper care for workers. China is a perfect example of this as is Mexico after NAFTA which allowed large companies to build on the boarder and then not pay taxes to import while being able to pay ridiculously low wages and not be responsible for safe working conditions or worker's compensation for injuries on the job. The case listed in the question is, in my opinion, even worse because they are not only getting their product produced at dirt low costs but also selling it at a higher price. Many companies like Walmart have factories in foreign countries in order to produce items that they can then sell at a competitively low price, however this example shows the opposite where they are not only taking advantage of cheap labor but also selling it under an expensive name brand. Another industry that is highly guilty of this is the diamond industry. If they can not only find a way to attain masses of a product cheaply but also sell it at a skyrocketed price, it is a win-win for the owners and a struggle to survive off the measly earnings for the workers. The ones doing the work should always be awarded commission, no matter what country the factory is based out of.
I agree with Sam, although it might be deplorable to Americans the truth is outsourcing is just good business. As long as they are conducting their business morally and in good taste, there should not be a limit to how much a company can make. Isn't competition and profit the goal of a capitalist society? Also, if limits were put on how much profit a company could make what's to stop the government from making even bigger decisions on which companies survive and which ones don't?
It is pretty ridiculous that products that are so cheap to make cost so much but I personally don't see any reasonable solution to this issue. Probably the best thing that we as consumers can do is to set a maximum amount we are willing to pay for jeans and the like to try and and pay only up to that much to prevent prices from increasing too far.
I think that by stoping companies from making the profits they do would violate their freedom as well as the principles of a capitalist society. It is the principle idea of the "Invisible Hand" of economics that the best way to attain high quality goods and a stable economy is for people to follow their desire for wealth and impulse for greed. This being said, however, I do not think that it is fair for them to exploit cheap workers in order to multiply their own profits. We can force any company to lower their prices by decreasing demand for that good- the less people are buying their product, the more the supplying companies have to reduce their price in order to attain any sort of profit. By doing this it wouldn't be much of an exploit any more, but it wouldn't be enough to force companies to come back to the US from overseas. The reason they moved there is to increase their profits and to come back would be to forego extra money.
I have to agree with most of you that there is a very slight probability to combat the ridiculous policies of corporate America. At the same time I think it can be fought individually. If someone really disagrees with it all they can buy only local. Which is, as you all have pointed put, more expensive due to the worker rights that this country enforces on the work place. Although I do agree that it is horribly wrong and that something needs to be done about it, I think it will never be change because the majority of us like our things too much. I am guilty of it, I absolutely LOVE my computer and I would really like the new iTouch which I have been saving up for. I also know that many allegations have been made about apple factories having horrible working conditions for their offshore personnel. And do not get me wrong I am in no way saying I endorse this. On the contrary I have tried really hard to stay away from products that I know come from these companies. But you want to know a fun fact? My cousin in Mexico really wanted an iPad for his birthday a month ago and has not gotten it because his parents are waiting to see of they can come and buy it here. In Mexico, all apple products are at least 100 dollars more expensive than they are here. Maybe we will never be able to conquer the corporate America, but if we really want to make a change then we can do it by changing our lifestyle.
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