Social dumping is a practice whereby employers use cheaper labour than is usually available at their site of production or sale, for example by moving production to a low-wage country or area, or employing poorly-paid migrant workers. Employers thus save money and potentially increase their profits. Systemic criticism suggests that as a result, governments are tempted to enter a so-called social policy regime competition by reducing their labour and social standards to ease labour costs on enterprises and to retain business activity within their jurisdiction. There is a controversy around whether social dumping takes advantage of an EU directive on internal markets, the Bolkestein directive.

Gains and losses

Entities losing from social dumping:

  • Employees in exporting countries
  • Child labor in exporting countries
  • Industry and environment in exporting country
  • Government in exporting countries
  • Employees in importing countries
  • Shareholders of the company in importing countries

Entities gaining from social dumping:

  • Companies in importing country
  • Shareholders in importing country
  • Customers in importing country
  • Industry in importing market
  • Employment in exporting country
  • Government and investment in exporting country

Policy issues

A joint NGO statement on the EU Seasonal Migrant Workers' Directive also warns against social dumping. The document argues that a vague definition of seasonal work might fail to cover all types of seasonal employment taking place when the Directive exerts its otherwise-welcome protective measures on the labour market.[1][2]

Marianne Thyssen, European Commissioner for Employment, Social Affairs, Skills and Labour Mobility, has noted that "there is no definition of the concept of "social dumping" in EC law".[3]

See also

References

  1. ↑ "Joint NGO Statement on EU Seasonal Migrant Workers' Directive" (PDF). Retrieved 27 August 2012.
  2. ↑ "Proposal for a Directive of the European Parliament and of the Council on the conditions of entry and residence of third-country nationals for the purposes of seasonal employment" (PDF). Retrieved 27 August 2012.
  3. ↑ Crown Commercial Service (UK), THE PUBLIC CONTRACTS REGULATIONS 2015: GUIDANCE ON SOCIAL AND ENVIRONMENTAL ASPECTS, footnote 6 on page 11, referring to a written answer given by the Commissioner on 14 August 2015, published 12 September 2016, accessed 28 December 2022
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