Can someone please tell me why....?

Question

"Imposing rich-country labour standards on poorer countries might help keep the rich rich and the poor poor."

I'm trying to do an essay on international regulation and I've found this quote but I don't know how to explain it....help me....please!!!

Answer 1

The only reason to move jobs to a poor country is because the labour standards are lower than in the country where the jobs already are. Theres no reason to move your plant to east Germany if its going to cost you the same amount to make the product as it does in west Germany.

That help?

Answer 2

The cost advantage held by the poorer countries, in terms of lower working conditions, environmental issues, etc., means that wealth creation is shifting from rich to poor, as production costs are lower, and rich are buying from poor.

If workers in poor countries live by the same standards as rich countries do, then they lose their "competitive advantage".

If they have no competitive advantage and they cannot become wealth creators, they will remain static.

Rich countries already have the wealth. The only way poor countries can change the status quo is if they create wealth by selling to rich countries.

If production costs in poor countries are set at the same level as production costs in rich countries, by imposing rich county labour and environmental standards, then they will no be able to sell to rich countries, hence the wealth will not be being transferred to the poor countries.

So rich will remain rich, and poor will remain poor.

Answer 3

Rich-country labor standards are notoriously more costly to implement than poor-country standards, which is probably why they aren't implemented in the first place. Such standards would keep manufacturers out of many poor countries (since they go there to AVOID the rich-country standards and the associated expenses, generally), which prevents development from trickling down to the populace at large.