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As a result local workers are paid badly
TNCs are footloose and may move their operations out of a country at any point – in search of lower wages and cheaper production elsewhere. This creates economic uncertainty within the host country. Because they are transnational TNCs can avoid paying full taxes in the countries where they operate. This affects the services governments are able to provide for local people – in this way TNCs do little to help LEDCs develop.
Dangerous or environmentally damaging procedures are moved to LEDCs which become the back-yard dumping grounds of the west.
The products of TNCs are consumed in almost every country on earth. This erodes local diversity and homogenises our tastes and cultures.
Over 90% of TNCs have their headquarters in the developed world. The profits simply go into the pockets of their shareholders – rich, privileged westerners. Although it is clear that MNCs pay less to workers in host countries than they would to workers in their country of origin, they generally pay between 10% and 100% more than local labour rates.
Large swathes of industry have been lost to overseas markets. There are now large pockets of poverty throughout the US and the UK.
TNCs encourage capital to move in and out of countries – often very quickly. The Asian Tiger economy is a good example of this. A lot of money/investment was moved into the Asian economy and then just as quickly money left that economy. If we allow capital to move around the world without regulation it becomes rootless – it moves in to create a boom and moves out to create a recession.
TNCs have changed our working patterns towards more shift workers and more short-term contracts. As a result of this employees no longer form relationships with one another or with their company. Employees have jobs not careers.
TNCs simply offer consumers the best deal. Consumers want the best value and big business is the vehicle that gives it to them. TNCs have allowed consumers in developing countries to buy consumer goods that they would never have been able to buy in the past.
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