Cheap Asian Labour

[dlish]

ive been prompted to start this thread after nomcat posed the question in a different forum here in TFP.

cheap unskilled labour from usually india, pakistan, afghanistan, china and the phillipines make up the majority of the population here in Dubai. around 80% of the population come from these countries, although not all are cheap labour. some are skilled and semi skilled, others are professionals, engineers, doctors etc.

labourers however get next to nothing compared to the western expats who earn big tax free bucks (depending which country you hail from). the lines are drawn based on what passport you hold. regardless of the experience you have or the position you hold. had i held a lebanese passport instead of an australian one, id be getting a third of what i currenly get.


is it fair? is it morally right? it really depends on which side of the fence yo stand on.

heres some pro's of the situation from a company's POV

the labourers get fed or get a food and gas allowance
the labourers get company accomodation
they get tickets back home every 24 months
they get uniforms and laundry service
they work for anywherebetween 1-2 USD an hour (about 100USD /week)
cheap labour which is good for construction costs
they earn more than they do back home and are able to support up to 10 family members back home on a basic wage



here are the cons


- living quarters are usually crowded and up to 10 people live in a room
- they dont earn enough money to enjoy activities outside of work except backyard cricket
- they live away from home with no access to women and give women are hard time in the street
- cheap labour means inefficient workers. what one good tradesman could do in a day you'd need 2-4 labourers, this elimating the cost savings of the cheap labour.


from a monetary viewpoint, you could justify the cheap labour. from a human rights viewpoint, the UAE's been under intense worldwide scrutiny.

what do you think? if you ran a company, would you utilise cheap labour?
if you ran an IT business would you get a call centre in india to do your work for the sake of saving $?

[Cimarron29414]

Clearly you find this practice upsetting. I recommend that you allay your guilt by marching into your HR department and demand they cut your salary by two thirds.

[highthief]

No, it's not justifiable, IMO.

Locally here in Ontario, we employ some workers from Latin America - Mexico, Guatamala, etc. They work in the agricultural industry and get paid $10-12 an hour plus room and board. Those are pretty good wages. They either have about $2000 in disposable income a month or, really, they send most of it back home where it pays for a ton of things.

They do an immense job - because they are fairly compensated. This makes the agricultural industry in these parts very sustainable.

The $5 a day workers were getting in Dubai to build that great new tower is astonishing in a place of immense wealth like Dubai.

[nomcat]

Even if food, lodging, clothing, services etc are supplied to labourers, I don't see how £2.84/day can be seen as fair in any light.

[dlish]

the way they measure it is based on your expenditure.

if you're a western expat, you're more likely to earn more at home and spend more within the country, so they pay you more. The country needs professionals and the western expats fill that void that the locals are having difficulty filling.

asian staff will send 90% of the income back home the very next day that their salaries arrive in their account, so its not spent within the country. the banks despise it, but this is the norm the day after pay day.

highthief - not sure if you've been following the news, but dubai's in big debt problems at the moment. all the projects were built on loans and not petro-dollars. the money seems to be flowing from Abu Dhabi rather than Dubai lately.

cimarron - ill be there at the HR office at 8am. ill ask them to put me in a labour camp with 10 other hormonal guys while im at it.

nomcat - im a Quantity Surveyor, so im familiar with all the number crunching.

if you calculate the base salary, expenses, health insurance, services, lodging etc - you end up at around $5 USD cost to the company. sure its not a lot, but when you take the sheer number of labourers employed, 1 dirham (about 25c USD) extra person per hour will lead a few million dirhams added to the base yearly cost. in this market with everyone trying to cut their costs to stay competitive, its good business sense.

[highthief]

Originally Posted by dlish

highthief - not sure if you've been following the news, but dubai's in big debt problems at the moment. all the projects were built on loans and not petro-dollars. the money seems to be flowing from Abu Dhabi rather than Dubai lately.

I understand that, but the foreign labour (those from the poor Arabian, Asian and African nations anyway) have always been poorly paid, have they not?

I agree that no one is putting a gun to their heads to make them do it, but at the same time, these are dirt poor and uneducated people being taken advantage of by very wealthy and powerful people.

[nomcat]

Like highthief says, I get that no one is forcing them to work, but it's still exploitation isn't it?

[dlish]

i agree to an extent. its exploitation that these guys are willing to accept. i dont think its right.

taking advantage of poorer paid people is not illegal here and i dont see that changing anytime soon. but who's going to set a minimum wage when you can build your country on the back of cheap labour?

[Cimarron29414]

"Quick, quick. Let's create a problem which does not exist so we can create a government entity to fix said problem."

[roachboy]

partly this choice is a matter of what's politically acceptable.
from the 1920s onward, the dominant industrial logic in the united states tended toward relatively high wages. folk say that the logic extended outward from ford's 10-dollar day policy, which was linked both to limiting labor turnover in detroit during the 20s and enabling the creation of a credit system that enabled workers to acquire debt and so become consumers of the cars they produced. by the 50s, this basic logic had been shifted around the mechanism of collective bargaining.

so long as industrial production was understood as a national affair, so long as it operated within the confines of a nation-state as if the nation-state was a kind of natural boundary, it made sense (due to political pressure in the end, so by way of the union movement) for employers to see wage levels as in part a social cost. because manufacturers across the board incurred the same costs more or less, inside the odd world of capitalism things kinda worked.

this was all back in the day when indices of economic activity centered on production.

since the early 70s they've been stock market activity, which signaled a shift away from production, so away from a the politics associated with it (there's more that could be said about this, but hey, this is a messageboard so shorthand) to an emphasis on the movement of capital. this was of a piece with an ideological campaign that resulted in that lovely synonym for exploitation we call globalization. neo-liberal style.

so if all you're looking at is capital flows and such, then cheap labor is a no-brainer.
if the political context is such that paying some attention to social consequences is important, then cheap labor is counter-productive.

[highthief]

Originally Posted by dlish

taking advantage of poorer paid people is not illegal here and i dont see that changing anytime soon. but who's going to set a minimum wage when you can build your country on the back of cheap labour?

In that respect, what Dubai is doing is little different from what Canada and the US did in building their railroads with very low paid Chinese labourers - so in some ways it's a little unkind for us to throw stones.

One the other hand, we do live in what we like to think is a more enlightened age and so, IMO, we should - globally - be making more of an effort to treat all workers to a certain standard, at least when they are working in first world countries like Dubai.

[Walt]

Originally Posted by highthief

One the other hand, we do live in what we like to think is a more enlightened age and so, IMO, we should - globally - be making more of an effort to treat all workers to a certain standard, at least when they are working in first world countries like Dubai.

I'm not sure what you mean when you say we need to "treat" all workers to a certain standard. If you mean that they should be made aware of inherent dangers in a job, not placed in unnecessarily dangerous situations and be hired/fire without prejudice, then I agree. But if you're saying that everyone is entitled to a certain wage, no matter the job or how well they do it....well I disagree.

Manual laborers make shitty wages because anybody can do what they do. There is little to no skill involved in the tasks they perform. Given 5 minutes of instruction, ANYBODY can learn to operate a shovel, pick oranges or wash dishes. In other words, employers pay wages that they think are appropriate for the labor/service they are receiving. Should the laborer be unsatisfied with their compensation, he or she is free to quit and seek a better wage elsewhere. I fail to see anything wrong or "unfair" with this.

[highthief]

Originally Posted by Walt

I'm not sure what you mean when you say we need to "treat" all workers to a certain standard. If you mean that they should be made aware of inherent dangers in a job, not placed in unnecessarily dangerous situations and be hired/fire without prejudice, then I agree. But if you're saying that everyone is entitled to a certain wage, no matter the job or how well they do it....well I disagree.

Manual laborers make shitty wages because anybody can do what they do. There is little to no skill involved in the tasks they perform. Given 5 minutes of instruction, ANYBODY can learn to operate a shovel, pick oranges or wash dishes. In other words, employers pay wages that they think are appropriate for the labor/service they are receiving. Should the laborer be unsatisfied with their compensation, he or she is free to quit and seek a better wage elsewhere. I fail to see anything wrong or "unfair" with this.

We're talking about people making 5 dollars a day in one of the richest nations in the world. No one is suggesting they should be making 100K a year. But $5 a day in a nation of millionaires (and billionaires) is exploitation.

As already stated, no one is putting a gun to anyone's head - but we're not talking about Wal-Mart "exploiting" some young kid or dumb hick in the US. Such people are infinitely more savvy about the world than the dirt farmer from Somalia or Pakistan getting a big $5 a day to build a multi-billion dollar edifice in Dubai. These people might as well be from another planet for all they know of the business world. They are virtually indentured servants once they get off the plane/boat and step into Dubai (or Abu Dhabi or Kuwait or wherever).

[ring]

The dark side of Dubai - Johann Hari, Commentators - The Independent

& what roachboy said.

[dlish]

ring,

you'll find a whole lot of truth covered by even more untruths in that article you posted. that article came out about a year ago after a few pissed off brits complained to the media back home after the global recession. so its written in a bad light to start with.

it paints a picture that every company treats their labourforce like shit, which is far from the truth. i know for a fact that we dont, and we have thousands of employees. granted there are instances where these things happen but its not as dark as the article portrays it. in any case im happy to address any of the pointers the article makes if you wish.

[ASU2003]

Originally Posted by Walt

Manual laborers make shitty wages because anybody can do what they do. There is little to no skill involved in the tasks they perform. Given 5 minutes of instruction, ANYBODY can learn to operate a shovel, pick oranges or wash dishes. In other words, employers pay wages that they think are appropriate for the labor/service they are receiving. Should the laborer be unsatisfied with their compensation, he or she is free to quit and seek a better wage elsewhere. I fail to see anything wrong or "unfair" with this.

It's not just manual labor and call center jobs that are being farmed out though. And I'm surprised that no politician has linked the outsourcing of middle class jobs to the current 10% unemployment rate.

But people want lower prices, even if it means that others won't be able to find any work.

On a side note, I have heard the media news state that China has 1.3 billion consumers as if that is real. I will agree with them that a few of them will see Avatar (or whatever censored version they show), but how many will really buy Apple's new mythical tablet? Now, if the workers from India and China were able to earn more money, they may be able to buy the more expensive products from the western world.

[Willravel]

I wonder if this conversation could be benefitted from a move to philosophy or economics.

[roachboy]

will...i don't think so because the boundary conditions that shape how capitalist firms operate are set politically. they reflect/repeat ideological situations, the results of mobilizations and collapse of other mobilizations (for example the implosion of the trade union movement which coinicides with the rise of neoliberalism in a kind of vast repetition of the thatcherite model....for the neo-liberal types, particularly of a more herberthoover stripe, unions were bad bad bad...you know the drill), the correlates of these movements both inside and outside the boundaries (such as they are) of the state and so on.

"ethics" tends to be little more than a way of trying to act as though political situations are other than that.

economics---well, what's the point? the op tries to talk about the social conditions which enable or prevent differing degrees of exploitation, which is of course the thing capitalism produces more systematically. except on tv of course. but that's another story. economics is a subset of such conditions, a kind of ideological machine that uses the language of numbers to "ground" assumptions/models that are typically pretty arbitrary.

(well, you know...not *all* economists do this. but this is amurica dammit and we like metaphysics.)

such are my caffientated thinkings.

[indago]

Originally Posted by highthief

The $5 a day workers were getting in Dubai to build that great new tower is astonishing in a place of immense wealth like Dubai.

Well, they didn't gain this "immense wealth" by giving money away...

---------- Post added at 06:31 AM ---------- Previous post was at 06:09 AM ----------

Originally Posted by roachboy

from the 1920s onward, the dominant industrial logic in the united states tended toward relatively high wages. folk say that the logic extended outward from ford's 10-dollar day policy, which was linked both to limiting labor turnover in detroit during the 20s and enabling the creation of a credit system that enabled workers to acquire debt and so become consumers of the cars they produced.

Ford initiated a $5 day, not a $10 day. This at a time when workers averaged around $2.25 a day.

[highthief]

Originally Posted by indago

Well, they didn't gain this "immense wealth" by giving money away...

Sure - but other companies and nations have accumulated and built wealth while treating it's workers to a higher standard of living, in general.

I don't think anyone is expecting Dubai to pay manual workers 40K a year. But a bump up from 5 bucks a day seems pretty reasonable.

[Willravel]

Originally Posted by dlish

if you ran a company, would you utilise cheap labour?

Absolutely not. From the perspective of my own personal ethics, paying someone too little for their work is tantamount to theft. From an economic perspective, anyone with even a lick of experience can tell you that low income equals lower productivity. When I convinced my boss before last to give my department a pay raise, productivity went up considerably. IIRC, when I ran the numbers, paying them more actually saved the company money.

As an aside, in addition to paying people a bit more, in my experience productivity also tends to go up when people normally considered "grunts" are given more say in how a business is run. People tend to quit less, too, which means you don't have to spend more resources training new people.

Originally Posted by dlish

if you ran an IT business would you get a call centre in india to do your work for the sake of saving $?

No, but that has more to do with my experience with Indian call centers being inept. I want my customers to have a good experience with my hypothetical IT company, not have to be put on hold by a guy that doesn't know the first thing about my products or services.

[Charlatan]

I don't find that more pay equals more productivity translates all the time. I find that in many cases more pay equals more complacency. I've seen it happen many times.

I think something that is missing from many people's calculations here is that while these foreign workers are getting what you perceive to be a very low wage, this wage is a) the market rate and b) not a small amount of money back in their home countries.

To the first point: People would not travel thousands of miles to take a "low paying job" if there was no upside. The fact that so many are willing to travel so far suggests that there is a demand for these jobs and that the wages are what people are willing to accept in exchange for their labour. Remember that in addition to this wage they are also getting room and board.

To the second point: Wages are relative. In Sri Lanka, the Philippines, Bangladesh, etc. that $5/day translates into a lot of money. One person's wages, sent back home, can support many. I know a few Filipino domestic workers that support their entire family (Mother, Father, kids and husband) on 400 Singapore dollars a month. It's isn't luxurious living but it is a decent living.

While the conditions of the work camps could be better and some of the employers are a unscrupulous, I think this isn't as cut and dry as some would have it.

[highthief]

Originally Posted by Charlatan

To the second point: Wages are relative. In Sri Lanka, the Philippines, Bangladesh, etc. that $5/day translates into a lot of money. One person's wages, sent back home, can support many. I know a few Filipino domestic workers that support their entire family (Mother, Father, kids and husband) on 400 Singapore dollars a month. It's isn't luxurious living but it is a decent living.

And your high standard of living in Singapore (or Dlish in Dubai) is made possible, in large part, by the low wages being paid guest workers. Why would you be against the idea?

[Charlatan]

I can assure you that my standard of living is no higher here than it was in Canada. In fact, in some ways, my standard of living was better in Canada (not all just some).

You are comparing apples to oranges. Costs of living in one part of the world are not the same in other parts. My only real point in my post above is that it is not as cut and dry as some would have it. Are there improvements to be made? Yes. Are all of those improvements going to be had through raising wages? No.

[highthief]

Originally Posted by Charlatan

I can assure you that my standard of living is no higher here than it was in Canada. In fact, in some ways, my standard of living was better in Canada (not all just some).

It is compared to the ocean of poor people living all around little city states around Singapore and Dubai and the rest.

We live in a global economy and it's hard not to benefit to an extent from the low wages paid to people around the world, whether banana farmers in Ghana or low paid factory workers making my Gap shirt.

However, places like Dubai are doing to Asian and African poor what Canada did to the Chinese building the railroads, and it's no more morally right today than it was 100 years ago.

[Charlatan]

So what are you going to do about it? It's easy to point at Dubai but the fact remains that those living the West are also benefiting from this globalized economy where cheap labour can be used to manufacture products (everything from clothing and molded plastic to fast food and steel). When was the last time you shopped at Wall Mart? When was the last time you purchased something that was made in Cambodia, Laos, China, etc.?

You're soaking in it.


You point to my standard of living but you might as well point to your own.

[dlish]

highthief i dont think ive seen a begger on the streets in dubai in the 3 years ive been here. every time i go back home i see them on every corner in the CBD. is it indicative of the level of wages in the respective countries? no.

the truth is, asian workers tend to save a larger percentage of their money in order to support their families back home. westerners do not have that issue. westerners tend to have more disposable income than asians because westerners 'need' to buy their kids an xbox or a gap shirt. the wages take this into consideration.

are companies robbing peter to pay paul? again, i dont think so. 'we' as western expats dont get paid X so that asians are paid Y.

as charlatan has rightly noted, asian wages are decent wages compared to back home and it is worthwhile for them to be across the other side of the world.

western expats on the other hand dont make a significant improvement in their financial stability by going overseas to work and the standard of living doesnt really improve a great deal. in some instances yes, in others definately no. so i hardly see it that the big dollars are going to the western expats while the asian workers get pennies.

youve also got to remember that the western expats and professionals bring many management skills/systems and financial acumen that asians otherwise do not have or are not employed to do. so in order for someone to take on the role, sometimes it's essential that a westerner fill the role instead of an asian. the money comes with the title..usually.

[highthief]

Originally Posted by Charlatan

So what are you going to do about it? It's easy to point at Dubai but the fact remains that those living the West are also benefiting from this globalized economy where cheap labour can be used to manufacture products (everything from clothing and molded plastic to fast food and steel). When was the last time you shopped at Wall Mart? When was the last time you purchased something that was made in Cambodia, Laos, China, etc.?

You're soaking in it.


You point to my standard of living but you might as well point to your own.

I already acknowledged that it is near impossible to avoid buying things made in other nations by poorly paid workers at times and that we do benefit to an extent. But I know that everyone who works locally here - and in a developped nation - is paid at least a minimum wage and that is something places like Dubai will have to learn.

You know, Dubai is busy buying soccer teams for a billion dollars and splurging tens of billions on extravagent architecture. You'd think they could spare an extra shekel for people who build their wealth.

---------- Post added at 05:38 AM ---------- Previous post was at 05:31 AM ----------

Originally Posted by dlish

are companies robbing peter to pay paul? again, i dont think so. 'we' as western expats dont get paid X so that asians are paid Y.

western expats on the other hand dont make a significant improvement in their financial stability by going overseas to work and the standard of living doesnt really improve a great deal. in some instances yes, in others definately no. so i hardly see it that the big dollars are going to the western expats while the asian workers get pennies.

I can only speak to my experience. Every adult I have ever known who has gone to work abroad - including UAE and Saudi - did it for the cash and/or significant career advancement. Very few people uproot and move halfway round the world to a desert for less pay. So of course Westerners are heavily benefitting in one way or another.

I don't disagree that many positions do need to be filled by Westerners until such time as the local labour market is capable of filling those jobs. But those Westerners are benefitting very directly from the fact that the local labourers, domestics and dishwashers are being poorly paid.

[Charlatan]

I think the issue here is not wages per se. I really don't think you can equate what people make in minimum wage in the west vs. what they make in places like Dubai, Laos, Cambodia, etc.

I think the real issue is working conditions (hours works, child labour, health care, etc.) and living conditions for those that are migrant workers. I know that there are very stringent laws here to deal with these sorts of issues. I still read stories in the paper of workers being promised one thing and getting another (bait and switch) or being abused by their unscrupulous employers. The law here does not treat employers who abuse their employees (physically, emotionally, financially, etc.) kindly. Jail time and the cane were meted out on a woman who had been beating her domestic live-in helper.

You are correct that Westerners do benefit from the lower wages of "local labourers, domestics and dishwashers" but you are not seeing the whole picture. It is not just locals that are being paid lower wages, but imported labour as well. It is also not just Westerners, but locals that benefit from these unskilled positions being filled by people who accept lower wages.

The office I work in is a locally owned and operated organization. The management team has a few western faces on it. We were hired for our expertise which was not to be had in the local market. I can tell you that the other managers at my level are being paid the same as I am, some more.

Again, now on my fourth year of living here, I don't think it is as cut and dry a picture as you paint it.

[Cynthetiq]

I don't think that people seem to understand that it's not just about how much or how little they get paid. The overseas workers are taking care of family members back home. $143B in 10 months a huge amount of money.

Overseas remittances hit 14.3 billion dollars in 10 months : Finance General
Posted on : 2009-12-15 | Author : dpa
News Category : Finance

Manila - Remittances from millions of overseas Filipinos rose 4.5 per cent to 14.3 billion dollars in the first 10 months of the year, the central bank said Tuesday. The bank said the remittances during January-October were up from 13.7 billion dollars in the same period in 2008.

"The continued deployment of Filipino workers abroad has provided support to the steady flow of remittances over the 10-month period," the bank said in a statement.

In October alone, remittances rose 6.7 per cent to reach 1.5 billion dollars, the highest monthly remittance level on record.

The central bank attributed the higher remittances in October to a "seasonal pick-up in inflows" during the fourth quarter.

It added that overseas Filipinos sent additional money to help relatives recover from the devastation caused by back-to-back typhoons in September and October.

At least 8 million Filipinos live and work abroad. Their remittances, which totalled 16.4 billion dollars last year, account for about 10 per cent of the country's gross domestic product.

The major sources of remittances for the 10-month period were the United States, Canada, Saudi Arabia, Britain, Japan, Singapore, the United Arab Emirates, Italy and Germany.

You can look at the Filipino census for the overseas worker and see just what the stats are. They aren't just going because it's small wages, they are going because it's a better opportunity than what they can make back at home. Giving up your homeland, your family is not something easy to do.

[Charlatan]

I read somewhere that the Philippines biggest export is labour (mostly women). We held a job fair a few months ago and I think I saw one local applicant all day. The rest were from the Philippines looking to get a job, any job, here. And these were well-educated people with skills (most held University degrees or equivalent).