As manufacturing jobs are moving to
Third World nations and tech support is being
outsourced, there is concern that the
standard of living for most residents of
developed nations will gradually decline until all the world resembles a Third World nation.
Companies and investors move capital around the world in search of ever greater profit margins. Those nations with the fewest laws protecting workers' rights and most free to pollute are able to offer companies much lower costs of operation. As a result, these companies gain a distinct price advantage over those operating in more developed and democratic nations. As rich, massive corporations move their operations into repressive governments, there is a possibility that large corporations will gain ever greater control over the domestic and foreign policies of nations around the world.
Without democratic control of corporations world-wide (or, failing that, protectionist policies at home), even companies run with the best of intentions are forced to relocate or outsource in order to avoid bankruptcy. The result is unemployment in developed nations for the working class alongside increased wealth for the owning class (whose "jobs" surprisingly aren't moved overseas) - leading to a greater percentage of jobs that serve only the wealthy. The threat of unemployment can then be used as a weapon to keep employees from "misbehaving". Laws protecting employees and the environment in developed nations, in many instances, will have to be removed in order to compete with more repressive nations closer to the bottom.
Even within a nation, if one company (for example, Wal-Mart) is treating its workers poorly, fighting unions, it will be able to offer lower prices than its competitors - forcing them to follow its example in order to survive.
Low pay in turn forces employees to purchase ever lower priced goods, further pushing more virtuous companies to the brink. The local politicians in various states and provinces within a nation are then pressured by local unemployment numbers to rollback laws providing for decent working conditions and cleaner environments in order to become more "business friendly" and attract the capitalist.
Further reading:
http://www.thirdworldtraveler.com/Brecher/Race%20to%20Bottom_GVGP.html
http://www.thirdworldtraveler.com/Korten/RaceBottom_WCRW.html
http://www.commondreams.org/views04/0218-10.htm