What is social dumping?
Social dumping is the use of wages and benefits that do not meet the set standard in the country to reduce production costs. Companies can rely on foreign work or in particular negotiated agreements to find employees accessible non -standard conditions. Their use of cheap work allows them to increase profits because they can sell goods at standard prices, even if it costs less. Nations in many areas of the world are concerned about social dumping and have taken measures to reduce it.
The protection of work should apply to all workers. In social dumping of society, skirt legal protection of workers. They can offer a bare minimum to satisfy the law or actively pay off. Their workers earn less money than employees in comparable jobs and may not have advantages and other protection that are standard for workers. Companies can move to use foreign workers and therefore cause loss of work in one nation inpersecution of workers in anotje. Their bargaining force is limited due to their low social status. The offer of work, even at low wages, is too tempting to pass on, and therefore workers will agree to contracts that do not meet or disadvantage industry standards. Social dumping can allow companies to move production to prevent high taxes and tariffs, not only higher wages.
Social dumping critics claim that companies will gain an unfair advantage by reducing costs, so they have a leg on a market where other companies can follow working standards and practices. These are special concerns if the process involves moving to the country to take advantage of a special agreement on working conditions. Companies can attract foreign investments and operations by granting concessions, allowing companies to move nations with already favorable workKONY and receive even more favorable treatment from the government for business there.
Other economists and market analysts claim that what some call "social dumping" is simply a natural outflow and flow of market conditions. Companies will naturally look for ways to reduce production costs, including relocation to take advantage of better business conditions. This counterargument suggests that nations fearing social dumping should first consider their own working laws and determine whether it is possible to change the regulatory climate to encourage businesses to remain.