Final answer:
Equal pay for equal work should be considered in the context of the global pay scale and differences in the cost of living and economic standards. Multinational corporations often provide higher wages in developing countries compared to local businesses, contributing to economic development.
Step-by-step explanation:
Equal pay for equal work is an important principle to consider in the context of this question. While it may seem unfair that the American software tester earns significantly more than the Indian software tester, it is important to understand the economic and social factors at play. In many cases, multinational corporations provide higher wages and better benefits in developing countries compared to what local businesses can afford. This is known as the wage gap or the global pay scale.
The wage gap is influenced by various factors, including differences in the cost of living, labor market conditions, and local economic standards. For instance, the cost of living in Palo Alto, California, is significantly higher than in Bangalore, India. As a result, companies adjust their salaries accordingly to accommodate these disparities and ensure employees have a comparable standard of living.
While it may seem unfair from a purely numerical standpoint, it is essential to consider the local economic context and the purchasing power parity (PPP) of the wages. By providing employment opportunities and paying better wages than the local market, multinational corporations contribute to the economic development of the region.