Export Processing Zones refer to specialized export factories or plants located in a country but exempted from the labor laws and domestic taxes of that country. The multinationals running the zones benefit from cheap labor and relaxed labor laws while the host country benefits from foreign exchange and creation of employment for its lowly paid workers. EPZ’s initially and still up to now, have acted as excellent platforms for the creation of job opportunities in a country and even better avenues for marginalized groups such as women to earn a wage from the job market. They have enabled third world countries whose income levels are relatively low to also benefit from global trade as multinationals are allowed to set up these export processing zones in these countries under special conditions different from what domestic companies are exposed to.
In export processing zones, the host countries earn foreign exchange and experience job creation in exchange for exempting the companies from paying domestic taxes and from following the country's labor laws. At first, the creation of job opportunities for low-income earners who work in the zones will seem like a huge advantage for the host country but these benefits are short-lived and outweighed by the negative effects on the labor market. EPZ's do not adhere to the normal labor regulations applied to other companies in the given country meaning they are usually free to come up with their micro-policies on labor which usually result in the laborers therein being exploited by their supervisors. Most EPZs have a highly feminine workforce and the feminization of labor laws there exposes them to exploitation by the management, something that would have been avoided if the country’s labor laws would be applicable in the zones.
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With this in mind, coupled with the fact that these zones can now be set up virtually anywhere in the world and not just third world countries, it means that companies can easily bypass labor laws in countries and set up their employment policies different from those in the host country. This disregard for local labor laws leads to a weakening of the regulations of employment conditions and casualizes labor as it creates a vacuum where people can operate in disregard of local labor laws. This labor casualization is made even worse by the fact that these zones are now not restricted to third world countries only and it is possible to have these zones in first-world countries resulting in a situation where third-world labor conditions are introduced into first-world economies leading to a globalization of the casualization of labor.
EPZs are already favored and protected more than domestic markets thus the effects of labor casualization are felt much more by workers. The proliferation of EPZs means that the conditions that allow for exploitation of workers are being continuously created which is bad for labor issues. The casualization of labor also means that corporations will outsource labor to the cheapest workers at will or will automate their services in a bid to remain competitive meaning workers in first world countries and even developing countries all have their jobs threatened by outsourcing to EPZs and have to accept longer working hours and lower wages similar to those in the zones. EPZs are good engines for job creation and foreign exchange sources for a country but the laws governing them should be a bit more restrictive to ensure these companies are not given a free hand to create their labor laws and create an imbalance in the employment regulatory framework both in the country and internationally.
