International and Comparative Employment Relations Essay

International and Comparative Employment Relations - Essay Example The works on the labour standards and race to bottom are rather limited in the existing literature. Developed countries are now under the radar as there have been evidences that OECD countries are compromising on their labour protection issue. Many multinational companies like Foxconn are increasingly coming under scrutiny due to the unfair labour practices promoted by them (Chan, 2013). The purpose of this essay is to discuss the optimal labour standards mechanisms that should be developed by multinational companies so that they can qualify to be sustainable. The essay first establishes the problem that is being faced by the labourers and then discusses possible measures to improve the situation. The problem of race to bottom in labour market has been traced to the collective bargaining power of the labourers. The research conducted by Javorcik and Spatareanu (2011) had shown that multinational companies have been greatly deterred to enter into countries which have high labour costs on account of collective bargaining, a condition which is largely prevalent in the developed countries. The research conducted by Davies and Vadlamannati (2013) had shown that OECD countries have greatly relaxed their labour practices and joined the race to bottom. Their research had pointed out that it is not the labour laws which have gone through changes. It is rather the labour practices related to the enforcement of labour laws which have been hampered to a great extent. This behaviour of the countries can be directly seen as an attempt to attract higher Foreign Direct Investment (FDI). Similar findings were also made by Olney (2010) and he had observed that nations are engaged in a cut thro at competition with one another to reduce labour standards.