Controversy surrounds both the economics and ethics of offshoring. In this section, we apply some of
the ethical theories from Chapter 1 to analyze the practice from an ethical perspective. This is a good
example for trying to distinguish economic advantage from ethical arguments. Several countries have
passed legislation to restrict the hiring of foreign workers for some industries. The discussion here might
provide insight into the ethics of such legislation. Here is the scenario we examine:
You are a manager at a software company about to begin a large software project. You will need
to hire dozens of programmers. Using the Internet for communication and software delivery,
you can hire programmers in another country at a lower salary than programmers in your
country. Should you do this?31
For the discussion, we assume the software company is in the United States and the manager is
choosing between U.S. and Indian programmers.
The people most obviously affected by the decision in this case are the Indian programmers and the U.S.
programmers you might hire. To generate some ideas, questions, and observations about these two
groups, we will use utilitarianism and Kant’s principle about treating people as ends in themselves. How
can we compare the impact on utility from the two choices? The number of people hired will be about
the same in either case. There does not appear to be any reason, from an ethical point of view, for
placing a higher weight on the utility of one group of programmers merely because of their nationality.
Shall we weigh the utilities of the programmers according to the number of dollars they will receive?
That favors hiring the U.S. programmers. Or should we weigh utility by comparing the pay to the average
salary in each country or by comparing the number of other job opportunities available? Those
measures might favor hiring the Indians. We see that a calculation of net utility for the programmers
depends on how one evaluates the utility of the job for each group of programmers.
What happens when we apply Kant’s principle? When we hire people for a job, we are interacting with
them in a limited role. We are making a trade—money for work. The programmers are a means to an
end: producing a marketable product at a reasonable price. Kant does not say that we must not treat
people as a means to an end, but rather that we should not treat them merely as such. And, indeed, the
hiring decision does not obviously treat the potential programmers of the two countries differently in a
way that has to do with ends and means.
Are you taking advantage of the Indian programmers, exploiting them by paying them less than you
would have to pay the U.S. programmers? Some people believe it is unfair to both the U.S. and Indian
programmers if the Indians get the jobs by charging less money. It is equally logical, however, to argue
that paying the higher rate for U.S. programmers is wasteful, or charity, or simply overpayment. What
makes either pay level more “right” than the other? Buyers would like to pay less for what they buy, and
sellers would like to get a higher price for their goods and services. There is nothing inherently unethical
about choosing the cheaper of two products, services, or employees.We can argue that treating the Indian programmers as ends in themselves includes respecting the
choices and trade-offs they make to better their lives according to their own judgment, in particular in
offering to work for lower wages than U.S. programmers. But there are special cases in which we might
decide otherwise. First, suppose your company is doing something to limit the other options of the
Indian programmers. If your company is lobbying for U.S. import restrictions on software that Indian
firms produce, for example, thus decreasing the availability of other programming jobs in India, then you
are manipulating the programmers into a situation where they have few or no other choices. In that
case, you are not respecting their freedom and allowing them to compete fairly. You are, then, not
treating them as ends in themselves. We will assume for the rest of the discussion that your company is
not doing anything like this.
Another reason we might decide that the Indian programmers are not being treated as ends in
themselves, or with respect for their human dignity, is that their working conditions would be worse
than the working conditions that U.S. workers expect (or that law in the United States requires). The
programmers might not get medical insurance. They might work in rundown, crowded offices lacking
air-conditioning. Is hiring them to work in such conditions unethical, or does it give them an opportunity
to improve conditions in their country?
Whether or not it is ethically required, there are several reasons why you might pay more (or provide
better working conditions) than the law or market conditions in India require: a sense of shared
humanity that motivates you to want to provide conditions you consider desirable, a sense of generosity
(i.e., willingness to contribute to the improvement of the standard of living of people in a country less
rich than your own), and benefits for your company. Paying more than expected might get you higher
morale, better productivity, and increased company loyalty.32 Often, in various countries, a large group
of potential workers (e.g., foreigners, recent immigrants, ethnic minorities, low-skilled workers, and
teenagers) will work for lower than the standard pay. Some countries have laws that require the same
salary be paid to all workers performing similar tasks to prevent employers from exploiting the less
advantaged workers. Historically, a result of these laws is that the traditionally higher-paid group gets
most of the jobs. (Often that has been the hidden intent of the law.) In this case, the almost certain
result of requiring equal pay would be hiring the U.S. programmers. The law, or an ethical requirement
that the pay of the Indian programmers and the U.S. programmers be the same, would protect the high
incomes of programmers in the United States and the profits of companies that pay higher salaries.
Your decision affects other people besides the programmers: your customers, the owners or
stockholders of your company, and, indirectly, many people in other businesses. Hiring the Indian
programmers increases the utility of your company and customers and infuses money to the community
where the programmers work. The customers benefit from the lower price of the product, and the
owners of the company benefit from the profits. If the product is successful, your company might pay
for advertising, distribution, and so on, providing jobs for others in the United States