Winners and Losers

 

vs.

 

Winners

  • The US and other foreign companies benefit from the cheap labor provided in the zones because they are able to cut costs by paying their employees less

 

  • The US consumers, who create the demand and drive the employment in the zones, are benefited by lower production costs, which result in lower prices when the goods reach the stores

 

  • The Dominican Republic economy benefits from the employment the zones provide, the foreign direct investment, and the foreign exchange, which are helpful in boosting the economy

 

  • The location of the Dominican Republic is what makes it a prime target for EPZ development. Because it is centrally located in the Caribbean, it has a comparative advantage in low transportation costs

 

  • US enterprises benefit because they can escape tough labor, social, and environmental laws in the US

 

  • Dominican women are provided opportunities to work, which is not always seen as ideal, but it is work none the less

 

  • The US, because they enjoy duty-free imports and exports from the Dominican Republic

Losers

  • The Dominican Republic workers, because enterprises are very much cost oriented and are more interested in keeping labor costs to a minimum than improving the productivity of labor

 

  • The Dominican Republic, because the exploitation of workers in the zones leads to low morale. Work is difficult, and the result is people who are exhausted and not participating in the economy

 

  • The US because employment is needed in many areas of the US, and when companies move their production factories overseas, the opportunities to decrease unemployment go with them

 

  • The Dominican economy, because they are missing out on the money that could be earned from taxes imposed on the goods entering and leaving the country.

 

  • The Dominican economy because in order to attract investment they have to keep labor codes minimally enforced, which leads to mistreatment of their own people in order to accommodate foreign investors

 

  • Children, because the wages offered in the zones are not sufficient parents have to work overtime in order to make ends meet. Therefore, time invested in children is sacrificed. Also, children are forced to leave school in order to help their parents pay the bills.

 

  • Women, because they are further repressed and over-worked as loyal mothers, faithful wives, and exploited EPZ employees

 

What can be done?

Should we, as US citizens boycott all companies who do not respect labor laws and continually repress workers?


Although this would seem like a worthy cause, it is not the answer. If we stop buying from the companies who produce in EPZs it will only make the situation worse. The reason these zones exist is because there is a market for them, and because of the competition in the global economy, US companies are forced to look for ways to lower the cost of production. If we stop buying from companies who produce in the zones there will be no need for them, and the jobs that are provided would be lost.

 

Should companies be forced to pay workers in the zones more?


This idea jumps out at me, and I definitely believe that it could be done, but once again, the reason these zones exist is because they provide companies with a way to lower costs, and that is mainly by cheap labor. Of course companies could afford to pay workers more money, but that would defeat the purpose of US companies moving production to the zones. My fear in regulating how much companies ought to pay is that they will begin to move their factories to other countries in the same way they moved them from the US. That would lead to unemployment in the Dominican Republic, and that is what we are trying to avoid.

 

I am not sure if anything can be done. With the competition as fierce as it is in the world today everyone is looking for ways to survive. US companies have to take advantage of cheaper labor because that is one of the only ways they can compete with foreign competition. Dominican workers have to deal with low wages because if they complain too much the employment that is provided will disappear. It is a vicious struggle, and ultimately the strong will be the ones who survive.

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