In theory, cheap labor is good for investors. All other things being equal, the less you have to pay to produce, transport, and sell goods, the better it is for the company's bottom line.
But all other things aren't equal.
Low wages and minimal staff can compromise job performance and cost businesses more down the road. Recent labor woes at Walmart (WMT) prove just how costly it can be to rely on cheap labor.
Motley Fool Contributor M. Joy Hayes, Ph.D. is the Principal at ethics consulting firm Courageous Ethics. She has no position in any of the companies mentioned. The Motley Fool recommends Costco Wholesale. The Motley Fool owns shares of Costco Wholesale.