Critical Review: MNCs, Labor Standards, and Developing Countries

This report presents a critical review of the research paper "Multinational Corporations’ role in improving labor standards in developing countries" by Mintz (2009). The review analyzes the author's arguments regarding the capacity of large organizations to enhance labor standards, particularly within the context of developing nations. It examines the role of Foreign Direct Investment (FDI) and its impact on labor standards, as well as the limitations of MNCs in isolation, highlighting the importance of other organizations like the World Trade Organization, the United Nations, International Labour Organization, and non-government organizations. The review also explores the influence of geopolitical and economic factors on international labor standards, the effects of trade liberalization, and the complex relationships between various stakeholders involved in the development of labor standards. The review identifies the paper's strengths, such as its detailed overview of the effects on labor standards, and weaknesses, such as lack of details on how MNCs can help in developing the labor standards in the developing countries. The review concludes by emphasizing the multifaceted nature of improving labor standards and the need for collaboration among various entities to achieve meaningful progress.

Running head- A CRITICAL REVIEW
A critical review
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Running head- A CRITICAL REVIEW
In the paper- “Multinational Corporations’ role in improving labor standards in
developing countries” Mintz (2009) has discussed the roles of several investors play to improve
the labor criteria in major emerging countries also analyzing the part of multinational
corporations. The article argues about how big organization’s capacity to improve labor standard
is a different issue which is often misunderstood.
The article questionnaires multinational corporations about their ability to improve the
labor standards. The author has analyzed that as big businesses are profit seeking tycoons, their
motivations are tied up complexly with the labor standards and practices of it. The second
argument of the paper focusses on FDI; foreign direct investment of multinational corporations’.
It has a selective and strategic flow manner, allowing some of the handful of the fast-growing
countries to enjoy the influence of the labor standards. Lastly, the paper discloses that the
MNC’s are not only entitled to improve the labor standards. Other organizations like the World
Trade Organization, the United Nations, International Labour Organization, and non-government
organizations are also equally engaged with the complexity of this political and economic
backgrounds. In this article, industries that are mass producing consumer goods in developing
are taken as research sample because of being labor intensive.
The author has also thoroughly discussed international labor standards, its advancement
in the situation of different geopolitical and environment of economic and global trade. It is
known to form the paper that International Labour Organizations were ensured for overseeing
labor standards. Questions like realization of decent work evolve with a communal and economic
advancement arise in the article too. The author also covers the link between MNCs and
developing countries in the section. MNCs are always attracted to growing countries because of.

Running head- A CRITICAL REVIEW
When US, Japan, and South Korea stopped their apparel industry in essence of economic growth,
then China and rest of the developing countries barged in (Blanton and Peksen 2016).
Developing countries are also drawn towards MNCs because of their FDI.
The article also has a detailed overview of the effects on labor standards, which is the
primary concern of the research. According to Manager and Shadlen (2014), North-South trade
disproportion and the demand for low skilled affects the wages in the developing countries.
Some scholars reject this hypothesis, which is also discussed in the paper. The declination of
payments in the Mexican apparel industry has been liked in the article for comparison (Reinhold
and Thom, 2013). The author has also explained the complex reality behind the strange alliance
between the parties which hold the development of the labor standard.
However, certain drawbacks were encountered in the article. The paper does not provide
enough details about how MNCs can help in developing the labor standards in the developing
countries. The paper misses out the point that with only FDI, a state cannot be improved.
Facilities that are provided to labors matter too (Coe and Hess 2018).
Thus, Mintz (2009) shows that MNCs cannot promote labor standards and improve labor
practice at the same time. Other parties like NGOs, international organization, and regional
government has an equal role to play in improving the labor standard.

Running head- A CRITICAL REVIEW
References
Blanton, R.G. and Peksen, D., 2016. Economic liberalization, market institutions, and labor
rights. European Journal of Political Research, 55(3), pp.474-491.
Coe, N. and Hess, M., 2018. Global production networks, labor, and development.
Manager, M.S., and Shadlen, K.C., 2014. Political trade dependence and North-South trade
agreements. International studies quarterly, 58(1), pp.79-91.
Reinhold, S. and Thom, K., 2013. Migration experience and earnings in the Mexican labor
market. Journal of Human Resources, 48(3), pp.768-820.