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Do TNCs benefit LEDCs?

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The operation of many TNCs in Less Developed Countries is often controversial. Transnational Corporations (TNCs) are companies with branches in many different countries worldwide. They have their headquarters in their country of origin, and many manufacture their products in LEDCs, where cheap labour is abundant, saving companies money. Do TNCs benefit LEDCs? TNCs do bring much needed jobs, teach workers new skills, and bring money to the host countries e.g. in the form of taxes to the government or by beginning to integrate the country into the global market. Sometimes they provide benefits for their workers, such as healthcare or extra training. Many TNCs provide higher wages and safer work conditions than local firms, making them more appealing. What are the disadvantages of TNCs in LEDCs? Most of the profits made do not actually go to the host countries - they are channelled directly back to the TNCs themselves. Many products manufactured for TNCs are done so in sweatshops, often by women working excessively long hours for minimal wages. These wages are usually the local minimum wage, but often they still do not constitute a living wage - enough for a worker to support themselves and their children. ...read more.


a day, and the average cost of 3 meals a day is $2 Many workers are forced to work up to 600 hours of overtime (without pay) per year. This is way above the Vietnamese legal limit of 200 hours of overtime per year. Workers can only go to the bathroom once in an 8 hour shift, and they cannot drink water more than twice per shift. One supervisor told a female worker that it is a common custom for men in his country to greet women they like by grabbing their behinds Another supervisor fled after being accused of the rape of a worker In Vietnam, lower wages can be paid to apprentices, but Nike exploited this by paying workers apprentice wages for many months. In 1997, workers in the gluing section of a Nike contract factory were being exposed to 100 times the Vietnamese legal limit of Toluene, a toxic gas. Many workers in the factory had serious respiratory problems. Nike can well afford to provide better working conditions in its factories and pay its workers a living wage. ...read more.


The general attitude amongst workers in LEDCs is that, understandably, a poorly paid job is better than no job. This is the reason there are always workers willing to be employed by TNCs. What is being done to combat the problem? Many TNCs are now in the process of revising their labour practise standards according to international levels, to avoid being associated with exploitative practices and because of bad publicity and the public's increasing awareness and aversion towards buying products manufactured by cheap labour in sweatshops. Conclusion It is clear that many TNCs have, and still continue to exploit working conditions in LEDCs. It is not enough for TNCs just to create jobs in LEDCs; I believe they should have a more social conscience and should try to put some of their ample profits towards providing opportunities for the workers, and helping development in the host country. If profits were lowered even by a small percentage, most TNCs could afford to pay workers much higher wages and greatly improve factory conditions. Some predict that as countries become more developed, TNCs will continue to relocate their manufacturing in poorer, less developed regions of the world, like Cambodia and Pakistan, in order to continue paying the minimal amount for maximum profits. ...read more.

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