Social dumping is a term that is used to describe a practice of employers to use cheaper labour, than is usually available at their site of (1) production and/or (2) selling. In the second case, migrant workers are employed; in the first, production is moved to a low-wage country or area. The entrepreneur will thus save money and potentially increase his profit. Systemic criticism suggests that, as a result, governments are tempted to enter a so-called social policy regime competition whereby they would reduce their labour and social standards in order to ease labour costs on enterprises and, eventually, to retain business activity within their jurisdiction.
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
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 will be exerting its otherwise welcome, protective measures on the labour market.
- "Joint NGO Statement on EU Seasonal Migrant Workers’ Directive" (PDF). Retrieved 27 August 2012.
- "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.
- European Union's Eurofound website: Social dumping
- Cabinet veterans challenge ministers to address 'social dumping' - The Guardian newspaper (UK) Tuesday 3 February 2009
- Social-dumping: a crisis in the UK Engineering Construction industry - Amicus website
- Social Dumping Hypothesis Issues and Challenges GMTDC Business Training & Consultation