Why do multinational corporations pay so LOW in developing countries when compared to large local corporations

Question

Not only do MNCs pay low wages to middle-management positions, but the annual growth rate in compensation is a measly 5%, whereas in large local corporations, you not only get high salaries & benefits, but you also get a minimum 10% annual increase. I guess training in an MNC would be ideal when one starts a career, but if you want the highest salaries, you should get a position in a large local company (LLC). Moreover, MNCs cap your salary within a very limiting range. I guess this is dictated by the corporate headquarters in the developed country (i.e., US, Europe).

By the way, I reside in South East Asia.

I have to categorically state that in this country that I reside in, MNCs do pay lower than LLCs because LLCs attract top talent with significantly higher compensation. On average, a LLC employee gets 80% more money than an MNC employee at the same level. That is a fact.

Answer 1

I know what you mean. This low wages of MNC in countries such as China and the Philippines is because of the priority factors for going into a certain country. For example, MNCs go to china for the low labor cost, hence becoming a global manufacturing hub, rather than being a design or fab center. Same story with the Philippines, where you have low wage blue colar jobs being the primary reason for investing in the country.

In effect, the wages of managers and executives in these countries are compressed downward. If they would pay higher than Large Local Companies, then the MNC would not have any justification to invest in the country in the first place. You should get experience and training from an MNC and get pirated to a LLC.

Answer 2

U should come and work in Penang, Malaysia dude, the MNC's here are the highest paying companies compared to local companies. On top of that, the local companies here make u to slog for long hours and weekends too.

Answer 3

If they generate revenue in other countries IT IS NOT SUBJECT TO OUR TAXES. If they attempt to cheat the government that is the function of the IRS. Without an exhaustive discussion about U.S. tax codes and the nebulous "Delta" corporation and the legal deductions that the code allows for expenses it is impossible to answer a vague question like this.

Answer 4

Global economics is a tricky thing. But multinationals have to compete in a global environment. It may not always seem fair but companies have to deal governments and their regulations. So if you don't like the policies of these multinationals you might want to petition your local government to change its laws.

Answer 5

...MNCs pay higher and more taxes, dahling...