The Relocation of Industry to Third Word Countries

by Marlynn Jenkins

Research for the 21st Century - Spring 2001

- a WAOL course


" Commerce is the most important activity on the face of the earth. It is the foundation on which civilization is built. Religion, society, education--all have their roots in business, and would have to be reorganized in their material aspects should business fail. " by James R. Adams, 1937 from Jackson, Michael, The MacMilliam Book of Business and Economic Quotations, 1984


In recent years, many of our largest factories have closed their doors and moved to countries where the wages are low. In my research I have found that several companies have actually moved several time as each country improved their labor laws to less developed countries.

Sweatshops owners have exploited women and children. It has been proven that these owners have forced their employees to work in horrible conditions paying well below the countries minimum wage. As these workers began to unionize, the employers have caused them great harm with beatings or fired them altogether. Although many companies have developed labor codes to help reduce poor working condition, there are still many companies out there that will purchase products from factories that do not comply with these labor codes.

Due to the relocation of manufacturing overseas, the unemployment rate has increased in countries where unions oversee these factories. Large numbers of people have had to find work for a lower wage than they have ever worked before. Many must go back to school to learn another trade just to survive.


Academic Disciplines

LC Subject Headings


Important Databases and Periodical Indexes



Global Exchange

Global Exchange is a non-profit orginazation dedicated to research and education of the people. The founders have been working to increase globalawareness of social and economic justice issues around the world.

Multinational Monitor

Multinational Monitor is a monthly publication by Essential Information, Inc. This organization tracks the activities of corporations as to health and safty of workes, labor unions, enviroment and hazardous substances and conditions. Their main focus is in Third World Countries.


US DEPARTMENT OF LABOR, World Almanac and Book of Facts, Bureau of Labor Statistics, 2000.
This shows a breakdown by selected countries of the hourly compensation cost between 1975 through 1998. It lists the statistics in US dollars of what a production worker in manufacturing is compensated for an hour of work. In 1998 a SriLanka worker was compensated $.47 per hour while a worker in Germany received $27.20 per hour.


The Columbia Encyclopedia, Sixth Edition, 2001, New York: Columbia University Press, 
       Last update:February 2001, “Child Labor,”, 2nd June 2001. 

This article explains that child labor became a social problem during the late 18th century Great Britain when people began working in factories. In 1802 Labor laws were created in Great Britain and in most of the European counties by the 1940's. It wasn't until 1934 that these laws took place in the U.S. The members of the International Labor Organization (ILO) began regulating child labor laws in factories. Treaties banning child labor that endangers the health, morals and safety of children was approved. By 1999 and estimated 250 million children were working in developing countries such as Asia and Africa.

Clarkson, Kenneth W., Roger LeRoy Miller, Gaylora A. Jentz, Frank B. Cross;  West's Business Law, 8th Edition.  2000 
     South-Western College Publishing 

Written by professors of Business Law, chapter 41 at page 760 explains the laws that affect children, wages-hours, labor unions, health and safety, leave, drug testing, and income security. There are examples of how these laws effected workers rights and jobs. The section on child labor has detailed information about the limits on the employment of children.


Cowie, Jefferson R., Capital moves: RCA's seventy-year quest for cheap labor, Ithaca, NY, Cornell 
     University Press, 1999. 

Jefferson R. Cowie from Cornell University, Industrial and Labor Relations department explains how RCA moved from one site to another looking for the cheapest labor costs available. As these workers became educated on workers rights, the company picked up and moved to another location hiring mostly uneducated women workers. He explains the history of labor relations in each new plant and how the labor unions stay local while the capital of the company became international, giving the workers nothing to stand on for the fight.

Williams, Mary E, ed., Child Labor and Sweatshops, Greenhaven Press, September 1998 

This is a group of articles written by different people on child labor all over the world. Teachers, journalist and human rights activists have written these articles. They discuss ways to ban the imports produced by children in these sweatshops and the unsafe conditions that they work in.



Weissman, Robert, “The Scourge of Child Labor,” Multinational Monitor, Jan/Feb 1997, pp. 10-26, 
     10:27, 16th May 2001, SIRS Knowledge Source, Gays Harbor Community College Library, 

Robert Weissman writes about the crises in third world countries with the use of child labor. Children under the age of 14 being forced to work full-time jobs with little pay. Most are put into bondage by their parents to payoff debt or food for their family. They work as servants, miner, divers, prostitutes, construction, shoe and garment factories, making cigarettes, rugs, charcoal, glass, ceramics, bricks, toys, sport equipment, surgical instruments (replacing needles), and in the match and firework industry. In places such as Nepal, India, Columbia, Cambodia, Pakistan, Asia, Burma, Thailand, Vietnam and many others. The jobs are hazardous to these children, physically, socially and psychologically. They are not educated. Although some large corporations are now working with labor codes, monitoring their subcontractors is an on going problem. These children grow up to be crippled and sickly adults.

McKenzie, Richard B., “Bidding of Business,” Society, March/April 1996, pp. 60-69, 8:44p.m., 23rd 
     April 2001, SIRS Knowledge Source, Gays Harbor Community College Library,   

A few years ago “Made in …” actually meant that a product was produced in that particular country. No so anymore. Now that these companies do not depend on the land to produce a product, they can pick up and move at anytime. They have less equipment to move and fewer people upset by the closure. Now many of these companies subcontract out for the products they need. The idea is to keep cost down and increase their profits by reducing taxes, employee and location costs.

Benjamin, Media, "Time for a Living Wage, Around the World," Global Exchange, Fall 1998, pp. 1+, 
     10:31 p.m., 16th May 2001, SIRS Knowledge Source, Gays Harbor Community College Library, 

Media Benjamin writes about the economic crises of factory workers employed by Nike, JC Penny and Ralph Lauren making cents per hour and living under the government poverty level. A conference held in the San Francisco Bay area put together by Sweatshop Watch and Global Exchange tried to come up with what a living wage is and ways to force industries to pay their employees wages that can support basic needs. Codes devised by the White House Task Force on Sweatshops and individual companies have been created to help increase the minimum wage for workers. This will give them the basic needs they need while only working a 48 hour work week. Recently students have organized to adopt codes of conduct for the companies that make the logos for their individual universities. CEO's in the US make 326 times that of a US factory worker and 27,710 time that of a worker in China or Indonesia.


Meyers, Linda; Capital mobility stifles unions, wages, say CU labor researchers. 19 Oct. 00, 8:13pm, 
     23April 2001,  

This article by Linda Meyers talks about the study by Kate Bronfenbrenner, “Uneasy Terrain: The Impact of Capital Mobility on Workers, Wages and Union Organizing” and the research team that led the study from Cornell’s School of Industrial and Labor Relations. It explains what we have known about the industry treatment of their employees.

The Layoff List, Casualties of an economic retreat. 9:46pm, 17th April 2001, MSNBC, Associate Press & Reuters 

This article is a list of recent corporate layoffs and cutbacks caused by the economic times in which we live. It was created by CNBC and the Wall Street Journal with help from the Associated Press and Reuters. This was one of the articles that got me interested in my topic.

REVIEW of my Research Process

Trying to find information about business relocation was very hard. The information I was looking for just was not available using this phrase. When I changed the way I search for information, I actually found more information. Using phrases such as child labor and sweatshops narrowed down my search giving me more information than I would ever have time to read.

This is the time when companies would rather close their doors and put many people out of work just to save a buck. They would rather move their capital to a new location where labor is cheep. It has become too easy to pack up and move to new locations. Most of these companies subcontract out to companies in developing countries to provide the products they need. Although the subcontractors are the cause of labor issues we here about today, the companies that purchase the products made by the hand of small children must also take the blame.

In my search for information, I became aware of all the abuse that is going on. The treatment of children and women is an outrageous. Efforts need to be made to correct these problems. We must stand up against the abuse and stop these companies from selling products made under such conditions. Organizations have begun influencing many large companies to stop this conduct. Now it is time for the consumer

I have been using the Internet as an information source for several years. I actually feel confident about most of the information found and do believe it is correct. I have found a few sites written by unprofessional people, but there are more good sites then bad. If I had the option to use a large library, I am sure there would be quality information to help me on any topic. My choice to use the Internet is only because it is so easy to use and close to home.

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