The Labor Cost
21 July 2006The Problem beyond Problems
It is ironic to note that the roots of all the burdens and sacrifices of the labor sector
lies on the labor cost. The chaos - most of the laborers, especially the ordinary worker doesn’t know about Labor Cost and the effects it inflicts to all the manufacturing industry, where most of these workers rely for their daily needs. Where does this labor cost located?
Before we go deeper, let me elaborate some of the sidetracks of this labor cost. The currency being used in the is dollar. The manufacturer’s product is being ordered o the materials used for a particular product is being imported from the world market. Then, this materials will be transported to the third world countries, where these manufacturing industries put up their factories, down to the production line. Take note of the expenses used, the currency is dollar. The production now then commence. Since countries presented with different currency, the expenses then will be converted to a local money. And the conversion of dollar to local currency varies depending on the standard of living a country displays. It will then be noted that every country presents a different labor cost due to the equivalent of the local money to dollar. Therefore, on the labor cost per se, the lower the labor cost, the lower the expense spent for the product.
Business is business, and the bottom point is profit. Thus, the countries presenting low labor cost in the world market will be the one to be chosen by the manufacturers because of the low labor cost, a part of the total budget to be spent for the product will be saved. This saved money either in local or dollar account is a clear profit.
And so, some of the investors or corporation left that particular country and put up their business to other countries that displays low labor cost.
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