Increase Profits, these corporations cut back on employees

Mohamed (2008) states: “The move from ‘patient capital’ to ‘impatient capital’ as a result of changes in the international financial markets is an important change from the Golden Age to the neoliberal era” (p9). The increased pressure to raise profits and the increased global competition has led MNCs to treat workers badly. To increase profits, these corporations cut back on employees, and decrease wages by reducing the benefits of workers. There has been an increase in casual and temporary workers. MNCs are able to reduce wages and benefits because of the credible threat they have to move labour to other parts of the world where work is cheap, unions are weak and markets are less regulated: “Indeed, an important phenomenon of the neoliberal era has been geographic relocation of firms to take advantage of lower costs in different countries that offer lower wages and less stringent regulation” (Mohamed, 2008, p10). Whatever gains workers may have made through unions in earlier times were reversed by this constant threat.

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