Unit 6 Peer Response Post 1

2. Define and discuss why some countries engage in “Social Dumping?”

There are three ways social dumping could take place. First high-cost producers could be displaced by low-cost producers from countries where wages, social benefits, and other costs are significantly lower. Some companies that have high labor costs would be increasingly free to relocate their operations, thereby putting downward pressure on wages and working conditions. Finally, individual states might be tempted to pursue a low wage and perhaps anti-union labor market strategy as part of their efforts to catch up economically. (Ericksno & Kuruvilla, 1994)

            Unions need to be concerned about social dumping because if companies are struggling to compete with products from other countries where costs are significantly lower, they will be forced to cut costs of their own. This could take several forms. Companies could leave their current location and move operations to a country where there are no minimum regulations, thereby causing employees to be out of work. (Budd, J. 2018 p. 389)

            Unions also need to be concerned about the possibility that states could pass anti-union legislation in an effort to help local companies compete with foreign markets. (Budd, J. 2018 p. 389) Social dumping could also lead to companies hiring cheaper foreign labor that is less prone to unionization. These cheaper laborers could cost union workers positions. (Social Dumping 2020)