A solution to the outsourcing issue seems impossible at times. With so many different stakeholders with different perspectives to please, inventing a resolution that would benefit all parties would be impossible. The main issue of outsourcing is money with some stakeholders not receiving enough while others capitalize their profits by exploiting these stakeholders. Although it seems unlikely Nike CEO would be willing to lose profit, we’ve established a compromise in which all parties are considered.
1. Establish a sort of outsourcing tax. If companies choose to outsource their jobs, they must pay a tax because they are stealing American jobs. The tax would still be less than hiring American workers.
2. Some of the money from the tax would go directly to the third world workers, giving them a higher salary and more livable wages. This would be monitored by the World Bank.
3. Foreign Labor unions for outsourcing would be established through the company and the World Bank to stop abuse and exploitation of low-skill workers.
4. If companies refuse to agree to this, consumers could ban together and decide to boycott Nike products for refusing to adhere to reasonable regulations to protect workers and human rights.
04 June 2009
01 June 2009
Nike -- President & CEO Interview.
Source: Finance Wire
Original Source: CNBC/DOW JONES BUSINESS VIDEO
MARIA BARTIROMO, CNBC ANCHOR: Nike is deepening its food hold around the world. The athletic apparel and footwear maker plans to open 100 stores globally over the next three years. Half of those new stores will be in the United States. The stock closing at a new all-time high today; take a look, $101.18, up 1 3/4 percent.
The announcement released today at Nike`s first analyst meeting in 16 months. CNBC`s Darren Rovell is at the company headquarters in Oregon with a special "First-on-CNBC" interview -- Darren.
DARREN ROVELL, CNBC REPORTER: Hi, Maria. I am here with Mark Parker, the president and CEO of Nike.
And Mark, $23 billion, that`s your projection for 2011. How do you get there?
MARK PARKER, PRESIDENT & CEO, NIKE: Well, we get there by doing what we`ve always done I think well and that`s focus on the consumer. We are breaking the company down into more focused segments by running, and basketball, and soccer, and men`s training, and women`s fitness, and sport culture. Those happen to be the big growth drivers for Nike going forward. So I think if we`re able to focus on the consumer and provide really compelling consumer experiences, we`re going to see that number.
ROVELL: A lot of buzz about those retail locations, only potentially 50 in the United States. How do you kind of gauge what you do with the retailers and make sure that you don`t upset what they do and work with them?
PARKER: Well, our retail strategy is all about working with our wholesale partners. We`re not becoming a vertical retailer. We are actually extending our commitment into vertical retail a bit. And the intent is actually to put Nike in a better position, to be a better wholesale partner, and create a more compelling experience for consumers.
ROVELL: You acquired a lot of those sub-brands that you have now: Converse, and Hurly, and some of the others; secured a billion dollar line of credit in December. What are you looking at from an acquisition standpoint?
PARKER: Well, we`re looking. We`re actively looking. We don`t have anything specific on our sights that I can talk to you about today, but I think it`s only the responsible thing to do, is to look at how we might use the acquisition route to generate some more growth potential for the company. So we`re actively looking.
ROVELL: As president on CEO, how much would you watch your stock price and how often? And do you believe the stock and the stock market is rational?
PARKER: I don`t watch the stock on a day-to-day basis. I really watch the consumer. I think our success as a company is really looking at how we can actually create a more compelling experience for the consumer. The stock price will follow from there.
ROVELL: A quick answer on this one, Crocs, Under Amour, everyone`s looking for the next thing. Is there room for everyone or do they cannibalize your share in the marketplace?
PARKER: I think there`s room for everybody. I think our strategy is really segmenting our business to grow the business. And again, working with our retail partners is -- and then investing somewhat in our own retail is the way to do that.
ROVELL: OK. And what about private equity? You know some -- we`re talking about 10 billion, $20 billion acquisitions. Do you think Nike could ever be acquired?
PARKER: That`s not in our plans, no. We`re actually very focused on growing our company. We think the $23 billion target is well within our sights; and very excited about doing that ourselves.
ROVELL: Thanks so much for joining me today.
So, Maria, the talk on the Street might be who is this next Nike? But Nike is saying we are Nike, keep focused on us. Back to you, Maria.
BARTIROMO: All right, Nike is the next Nike. Thank you very much. Great interview there, we appreciate it. Darren Rovell inside at the Nike`s analysts` meeting
How Outsourcing has Benefited Nike
Brittney Kuschnick
Stakeholder Position: CEO of Nike
Hello my name is Phil Knight and here’s how I put my dream into reality to become the sixth richest man in America.
As the CE
O of a well known company you find yourself constantly searching for ways to make your company strive. In order to become a great, profitable company you must first find ways to keep your labor, wages, materials, shipping , rental, and any other expenses at a minimum. This may be done by simply cutting back on the things that are not necessities or cutting back on the total hours used. By cutting back on the hours we allow our employees to work, we have cut our cost of labor. These are some of the simple and yet key elements to becoming a successful company just like we at Nike have done. Today there is a minimum wage law enforced by the government. The national federal minimum wage is $6.55 an hour as of July 24th 2008 compared to Oregon’s minimum wage, which is nearly over a dollar more at $8.40. Washington has the highest minimum wage in the United States with $8.55 an hour (The Department of Labor). The Northwest states of Oregon and Washington both have wage rates above the equilibrium. Therefore is an abundance of those willing to work and a small supply of those actually willing to hire for that price. Because Oregon’s minimum wage is above the national average, this may encourage those who live elsewhere to move to Oregon or Washington to seek employment. At the same time, employers are reluctant to hire workers at that wage level. This has caused many companies like us to ship jobs overseas to countries such as Vietnam, Indonesia, China, etc. This has resulted in a shortage of jobs available to a growing population that has been seeking a job (Mankiw, 2007). This is the reason why Oregon’s unemployment rate is slightly above the United States (8%) average at 12% but that’s still pretty good considering that 88% of the population that are able to work have jobs (The Department of Labor). Unfortunately situations like this are inevitable because how else can companies, like my own, make a profit and prosper in the United States when the cost of living makes it nearly impossible. In the United States we have a high cost of living with many luxurious amenities that are not accessible if at all available in third world developing countries. Everyday living expenses are way less in developing countries compared to the states.
In third world countries there are thousands of people willing to work to whom we provided the opportunity to have this job. Yes, what we pay them is only a fraction of what workers in the United States make, but in these countries they are plenty of workers willing to work for a couple cents an hour. In Vietnam there are workers willing to work for $0.20 an hour compared at Oregon’s $8.40 an hour that is a difference of $8.20 in labor costs per hour (Third World Traveler). For a Vietnamese worker working forty hours a week for a month he/she would have to be paid only $32 a month. For the same work to be done in Oregon we would have to pay 1344 in labor costs. At that rate, by shipping that one job overseas I have cut my labor costs done $1212 a month, which adds up to $14,544 annually per every 1 job shipped overseas. Plus in countries such as Vietnam it is illegal to create unions in order to bar
gain for better wages or working conditions. This means that we don’t have to deal with inflation causing the wage rate to increase in jobs overseas (Third World Traveler). Also the cost of producing our shoes is relatively low in foreign countries. In these countries we can produce a shoe that we will intern resale for $80-100+ for less than five dollars. That amounts to more profit and more money in my pocket as well as our shareholders (Third World Traveler). With all the profits we have collected this has allowed us to sponsor sports teams as well as professional athletes and the United States Olympic Team. Some famous athletes include Michael Jordan and Tiger Woods both of whom receive Nike profits through endorsements thanks to the hard working worker’s in foreign countries (Third World Traveler).
I have been questioned several times about the ages of the children working in the shops. Although it might seem strange for a 14 year old to be working, this is completely normal. In developing counties education may not be available or an option so this has led many to hit the work force at a young age. This is the alternative to school in these countries. These young workers learn valuable work ethics and techniques in order to bring money home to their family. Besides, the age disparity is not as extreme as it is made out to be. Using the United States as an example, at age 15 you can obtain a workers permit and are allowed to start working. By age 16, you can drive and work legally without a permit, so there really is not much of an age gap (The Department of Labor).In general I believe the best way to boost business profits are to ship jobs overseas. As we discovered for every job we send overseas not only do be save $14,544 annually in labor expenses. We also can make the same great product we offer to our customers at a cheaper price at the same time. We have found out that our customers are willing to buy a pair of shoes for $100 so if we can cut down on how much it costs to manufacture that shoe then the customers will still be buying and we will be making more profit than before. In the United States we have a high cost of living which makes it difficult to put all the necessary resources into making shoes due to the high cost associated with living here. This is why if companies see the potential in cheap labor and materials in foreign counties then they should go for it. This will allow for both business and profitable growth. This also opens up the door of opportunity with global trade and investments or business expansion overseas as well. This is what I did and am doing and it has led me in a positive direction.
Thank You,
-Phil Knight
NIKE Inc.
One Bowerman Drive
Beaverton, OR 97005
WORKS CITED
"Wage and Hour Division (WHD)." Minimum Wage Laws in the States - January 1, 2009 Web.28 Jun 2009..
Mankiw, Gregory. Principles of Economics. 4. New York: Thomson-South-Western, 2007. Print.
"Third World Traveler." Nike Fact Sheet Web.29 Jun 2009.
Stakeholder Position: CEO of Nike
Hello my name is Phil Knight and here’s how I put my dream into reality to become the sixth richest man in America.
As the CE
O of a well known company you find yourself constantly searching for ways to make your company strive. In order to become a great, profitable company you must first find ways to keep your labor, wages, materials, shipping , rental, and any other expenses at a minimum. This may be done by simply cutting back on the things that are not necessities or cutting back on the total hours used. By cutting back on the hours we allow our employees to work, we have cut our cost of labor. These are some of the simple and yet key elements to becoming a successful company just like we at Nike have done. Today there is a minimum wage law enforced by the government. The national federal minimum wage is $6.55 an hour as of July 24th 2008 compared to Oregon’s minimum wage, which is nearly over a dollar more at $8.40. Washington has the highest minimum wage in the United States with $8.55 an hour (The Department of Labor). The Northwest states of Oregon and Washington both have wage rates above the equilibrium. Therefore is an abundance of those willing to work and a small supply of those actually willing to hire for that price. Because Oregon’s minimum wage is above the national average, this may encourage those who live elsewhere to move to Oregon or Washington to seek employment. At the same time, employers are reluctant to hire workers at that wage level. This has caused many companies like us to ship jobs overseas to countries such as Vietnam, Indonesia, China, etc. This has resulted in a shortage of jobs available to a growing population that has been seeking a job (Mankiw, 2007). This is the reason why Oregon’s unemployment rate is slightly above the United States (8%) average at 12% but that’s still pretty good considering that 88% of the population that are able to work have jobs (The Department of Labor). Unfortunately situations like this are inevitable because how else can companies, like my own, make a profit and prosper in the United States when the cost of living makes it nearly impossible. In the United States we have a high cost of living with many luxurious amenities that are not accessible if at all available in third world developing countries. Everyday living expenses are way less in developing countries compared to the states.In third world countries there are thousands of people willing to work to whom we provided the opportunity to have this job. Yes, what we pay them is only a fraction of what workers in the United States make, but in these countries they are plenty of workers willing to work for a couple cents an hour. In Vietnam there are workers willing to work for $0.20 an hour compared at Oregon’s $8.40 an hour that is a difference of $8.20 in labor costs per hour (Third World Traveler). For a Vietnamese worker working forty hours a week for a month he/she would have to be paid only $32 a month. For the same work to be done in Oregon we would have to pay 1344 in labor costs. At that rate, by shipping that one job overseas I have cut my labor costs done $1212 a month, which adds up to $14,544 annually per every 1 job shipped overseas. Plus in countries such as Vietnam it is illegal to create unions in order to bar
gain for better wages or working conditions. This means that we don’t have to deal with inflation causing the wage rate to increase in jobs overseas (Third World Traveler). Also the cost of producing our shoes is relatively low in foreign countries. In these countries we can produce a shoe that we will intern resale for $80-100+ for less than five dollars. That amounts to more profit and more money in my pocket as well as our shareholders (Third World Traveler). With all the profits we have collected this has allowed us to sponsor sports teams as well as professional athletes and the United States Olympic Team. Some famous athletes include Michael Jordan and Tiger Woods both of whom receive Nike profits through endorsements thanks to the hard working worker’s in foreign countries (Third World Traveler).I have been questioned several times about the ages of the children working in the shops. Although it might seem strange for a 14 year old to be working, this is completely normal. In developing counties education may not be available or an option so this has led many to hit the work force at a young age. This is the alternative to school in these countries. These young workers learn valuable work ethics and techniques in order to bring money home to their family. Besides, the age disparity is not as extreme as it is made out to be. Using the United States as an example, at age 15 you can obtain a workers permit and are allowed to start working. By age 16, you can drive and work legally without a permit, so there really is not much of an age gap (The Department of Labor).In general I believe the best way to boost business profits are to ship jobs overseas. As we discovered for every job we send overseas not only do be save $14,544 annually in labor expenses. We also can make the same great product we offer to our customers at a cheaper price at the same time. We have found out that our customers are willing to buy a pair of shoes for $100 so if we can cut down on how much it costs to manufacture that shoe then the customers will still be buying and we will be making more profit than before. In the United States we have a high cost of living which makes it difficult to put all the necessary resources into making shoes due to the high cost associated with living here. This is why if companies see the potential in cheap labor and materials in foreign counties then they should go for it. This will allow for both business and profitable growth. This also opens up the door of opportunity with global trade and investments or business expansion overseas as well. This is what I did and am doing and it has led me in a positive direction.
Thank You,
-Phil Knight
NIKE Inc.
One Bowerman Drive
Beaverton, OR 97005
WORKS CITED
"Wage and Hour Division (WHD)." Minimum Wage Laws in the States - January 1, 2009 Web.28 Jun 2009.
Mankiw, Gregory. Principles of Economics. 4. New York: Thomson-South-Western, 2007. Print.
"Third World Traveler." Nike Fact Sheet Web.29 Jun 2009.
In Order to Stay on Top, Nike Must Straighten Up
Katie DeFord
Stakeholder Position: Nike Consumer
Nike is the world’s number one seller of shoes and athletic apparel. Boys, girl, men and women buy Nike shoes, t-shirts, basketball shorts, and other items daily, but have any of these people thought about where these products are coming from? Being a consumer of Nike apparel, every so often I have thought about where the items I buy come from; I have always looked at the tags and have seen “Made in Indonesia” or “Made in Taiwan,” but I never seen a tag labeled “Made in America”. Why is this? Nike is a brand known very well in America, so why are the products
not made here? After extensive research, the information is shocking. Nike, the world’s number one shoe seller, takes advantage of third world countries, underpaying, overworking, and in some cases, physically abusing workers. If Nike wants to keep the title of world’s number one shoe seller, the company needs to reevaluate how they produce their products and come up with a way to meet the needs to factory workers.
In America, as of July 24th, 2008, the U.S. federal minimum wage is $6.55 per hour and will be increasing to $7.25 July 24th, 2009 (Employment Administration Standard 2009). However, these numbers are not the same in other places. Nike produces its products overseas in places such as Indonesia, Vietnam and China and pays them less than a third of what the U.S. requires employers pay employees. Indonesian workers make $2.64, Vietnamese workers make $1.60, and Chinese workers make $1.75; but compared to America, these numbers are A DAY, not PER HOUR (Nike Production Facts 2009). From a customer’s point of view, these numbers are disturbing. How is it that consumers pay between $80 to $120 for a pair of shoes, but the workers who work day in and day out to make these shoes do not make close to what it costs to survive? If there is close to no money going to workers, then where is the money going? Nike is a multibillion dollar company, racking in $9 billion in projected revenue, and the CEO of Nike, Phil Knight, is said to be worth $5.2 billion (Nike Production Facts 2009). In order to survive, employees must work extensive amounts of overtime; however, in these factories, overtime is not just a couple hours—try several.
Due to the money (or lack of money) the employees in Nike’s factories are making, many are forced to work SEVERAL hours of overtime in order to survive. “In Vietnam, the cost of a meal is 60-90 cents, so the daily wage of $1.60 (per day) is not enough for three meals in the urban city of Ho Chi Minh (where Nike factories are located), let alone enough for transportation and shelter. The Indonesian government admits minimum wage is only 90 percent of subsistence needs for one person. In Vietnam, Reebok (one of Nike’s competitors) factories pay $65 per month, whereas Nike pays poverty level wages of $45 per month (Nike Production Facts 2009). Because Nike is not willing to pay their employees the wages they deserve, workers are forced into working up to 100-200 hours of overtime per month in order to only earn double of their minimum wages. Again, Nike rakes in billions of dollars a year in their sales, selling the products that these factory workers produce, yet workers have to work HUNDREDS of hours of overtime PER MONTH in order to survive? This should not be. Nonetheless, the lack of money and long hours are not the worst thing happening in factories overseas.
Workers in Nike factories overseas are abused physically and emotionally and that is something no one should EVER have to endure. “Nike has been in Vietnam for less than two years and already one factory official has been convicted of physically abusing workers, another fled the country during a police investigation of sexual-abuse charges and a third is under indictment for abusing workers, as reported in the New York Times” (Nike Production Facts 2009). If Nike is such a respected brand in the United States and known for all the donations they make and the great things they do, why are these things allowed to happen in the factories? Just because these workers are not on American soil does not mean they should not be treated with dignity and respect. The people in these factories are normal people trying to make a living for their family and themselves, but the factory owners are not doing their part. In order for Nike to continue to be number one, several changes need to be made.
As a customer of Nike, I do not support their actions in paying workers close to nothing, forcing people to work an overwhelming number of hours, and even physically and emotionally abusing employees. There are numerous changes Nike could make in order to please both customers as well as employees.
First, I believe that Nike could spare part of their $630 million budget in order to pay employees the money they truly deserve (Nike Production Facts 2009). In all fairness, these employees are the reason that Nike is who they are; without these workers putting in the time and effort to make great products, no one would have any idea who Nike is and they would not be selling anything. Nike should be thanking these workers day in and day out for the hard work they put towards making them the number one selling company in the world. By increasing employee wages, workers would not have to work hundreds of hours of overtime in order to survive. Doing so will give workers more of a reason to work hard and continue to produce the products people know and love.
Second, Nike should do background checks on the people they hire to be in charge of factories. I understand wanting to get a job done and a job done correctly, but physically and emotionally abusing someone is NOT the way to go about things. Having someone in charge who knows the proper way to go about directing people is the key to a successful company. Also, Nike may want to consider sending managers to meetings that will allow them to learn how to deal with certain situations; teaching these mangers a different way of dealing with all situations that does not involve violence will allow for managers to not lose their jobs. Improving the work environment for all factory workers will change the entire vibe of the factory and advance productivity.
Currently, Nike has quite a few changes that need to be made in order to create a safe environment. With the current wages employees are making not being enough for people to survive, many are forced to work hundreds of hours of overtime per month in order to sustain a livable lifestyle. Factory workers work very hard in order to make Nike the number one shoe seller in the world and making a few small changes is the least Phil Knight could do in order to thank these workers. Along with very minimal pay and extremely long work hours, some employees are being physically and emotionally abused by factory managers. Proper training of managers would allow for a safe environment, in turn lessening abuse and the number of people losing jobs. Nike may be the number one seller, but they are coming in last in employee appreciation; a few simple changes and Phil Knight can be looked at as one of the world’s richest men and the world’s nicest CEO.
WORKS CITED
"Employment Administration Standard." U.S. Department of Labor. U.S. Department of Labor. 1 Jun
2009.
"Nike Production Facts." Nike Shoe Production in the Third World. 2009. Third World Traveler. 1 Jun
2009.
Stakeholder Position: Nike Consumer
Nike is the world’s number one seller of shoes and athletic apparel. Boys, girl, men and women buy Nike shoes, t-shirts, basketball shorts, and other items daily, but have any of these people thought about where these products are coming from? Being a consumer of Nike apparel, every so often I have thought about where the items I buy come from; I have always looked at the tags and have seen “Made in Indonesia” or “Made in Taiwan,” but I never seen a tag labeled “Made in America”. Why is this? Nike is a brand known very well in America, so why are the products
not made here? After extensive research, the information is shocking. Nike, the world’s number one shoe seller, takes advantage of third world countries, underpaying, overworking, and in some cases, physically abusing workers. If Nike wants to keep the title of world’s number one shoe seller, the company needs to reevaluate how they produce their products and come up with a way to meet the needs to factory workers.
In America, as of July 24th, 2008, the U.S. federal minimum wage is $6.55 per hour and will be increasing to $7.25 July 24th, 2009 (Employment Administration Standard 2009). However, these numbers are not the same in other places. Nike produces its products overseas in places such as Indonesia, Vietnam and China and pays them less than a third of what the U.S. requires employers pay employees. Indonesian workers make $2.64, Vietnamese workers make $1.60, and Chinese workers make $1.75; but compared to America, these numbers are A DAY, not PER HOUR (Nike Production Facts 2009). From a customer’s point of view, these numbers are disturbing. How is it that consumers pay between $80 to $120 for a pair of shoes, but the workers who work day in and day out to make these shoes do not make close to what it costs to survive? If there is close to no money going to workers, then where is the money going? Nike is a multibillion dollar company, racking in $9 billion in projected revenue, and the CEO of Nike, Phil Knight, is said to be worth $5.2 billion (Nike Production Facts 2009). In order to survive, employees must work extensive amounts of overtime; however, in these factories, overtime is not just a couple hours—try several.
Due to the money (or lack of money) the employees in Nike’s factories are making, many are forced to work SEVERAL hours of overtime in order to survive. “In Vietnam, the cost of a meal is 60-90 cents, so the daily wage of $1.60 (per day) is not enough for three meals in the urban city of Ho Chi Minh (where Nike factories are located), let alone enough for transportation and shelter. The Indonesian government admits minimum wage is only 90 percent of subsistence needs for one person. In Vietnam, Reebok (one of Nike’s competitors) factories pay $65 per month, whereas Nike pays poverty level wages of $45 per month (Nike Production Facts 2009). Because Nike is not willing to pay their employees the wages they deserve, workers are forced into working up to 100-200 hours of overtime per month in order to only earn double of their minimum wages. Again, Nike rakes in billions of dollars a year in their sales, selling the products that these factory workers produce, yet workers have to work HUNDREDS of hours of overtime PER MONTH in order to survive? This should not be. Nonetheless, the lack of money and long hours are not the worst thing happening in factories overseas.
Workers in Nike factories overseas are abused physically and emotionally and that is something no one should EVER have to endure. “Nike has been in Vietnam for less than two years and already one factory official has been convicted of physically abusing workers, another fled the country during a police investigation of sexual-abuse charges and a third is under indictment for abusing workers, as reported in the New York Times” (Nike Production Facts 2009). If Nike is such a respected brand in the United States and known for all the donations they make and the great things they do, why are these things allowed to happen in the factories? Just because these workers are not on American soil does not mean they should not be treated with dignity and respect. The people in these factories are normal people trying to make a living for their family and themselves, but the factory owners are not doing their part. In order for Nike to continue to be number one, several changes need to be made.As a customer of Nike, I do not support their actions in paying workers close to nothing, forcing people to work an overwhelming number of hours, and even physically and emotionally abusing employees. There are numerous changes Nike could make in order to please both customers as well as employees.
First, I believe that Nike could spare part of their $630 million budget in order to pay employees the money they truly deserve (Nike Production Facts 2009). In all fairness, these employees are the reason that Nike is who they are; without these workers putting in the time and effort to make great products, no one would have any idea who Nike is and they would not be selling anything. Nike should be thanking these workers day in and day out for the hard work they put towards making them the number one selling company in the world. By increasing employee wages, workers would not have to work hundreds of hours of overtime in order to survive. Doing so will give workers more of a reason to work hard and continue to produce the products people know and love.
Second, Nike should do background checks on the people they hire to be in charge of factories. I understand wanting to get a job done and a job done correctly, but physically and emotionally abusing someone is NOT the way to go about things. Having someone in charge who knows the proper way to go about directing people is the key to a successful company. Also, Nike may want to consider sending managers to meetings that will allow them to learn how to deal with certain situations; teaching these mangers a different way of dealing with all situations that does not involve violence will allow for managers to not lose their jobs. Improving the work environment for all factory workers will change the entire vibe of the factory and advance productivity.
Currently, Nike has quite a few changes that need to be made in order to create a safe environment. With the current wages employees are making not being enough for people to survive, many are forced to work hundreds of hours of overtime per month in order to sustain a livable lifestyle. Factory workers work very hard in order to make Nike the number one shoe seller in the world and making a few small changes is the least Phil Knight could do in order to thank these workers. Along with very minimal pay and extremely long work hours, some employees are being physically and emotionally abused by factory managers. Proper training of managers would allow for a safe environment, in turn lessening abuse and the number of people losing jobs. Nike may be the number one seller, but they are coming in last in employee appreciation; a few simple changes and Phil Knight can be looked at as one of the world’s richest men and the world’s nicest CEO.
WORKS CITED
"Employment Administration Standard." U.S. Department of Labor. U.S. Department of Labor. 1 Jun
2009
"Nike Production Facts." Nike Shoe Production in the Third World. 2009. Third World Traveler. 1 Jun
2009
Why Outsourcing Means Global Financial Stability
Valerie Barnhill
Stakeholder Position: U.S. Government (World Bank)
The objective of governmental institutions like the World Bank and the International Monetary Fund (IMF) is to provide a globally regulated financial center. Among the most important services that these financial centers provide are loans so that countries that are developing can be more stable economically. The World Bank and IMF have been successful in their efforts. A survey conducted by the BBC indicates that most countries view the World Bank favorably. According to the article, “the global public clearly sees it as positive that there are international institutions that seek to address the problems of poverty and economic instability, and on balances see them doing more good than harm...countries that have been recipients of World Bank loans are particularly positive about the influence. Africans are especially enthusiastic –Kenya (81% rated it positively), Tanzania (79%)...” From this, it is evident that developing countries are truly benefiting from the World Bank’s efforts.
A big part of the efforts of the United States to help developing countries be viable and autonomous is the practice of outsourcing. Outsourcing is a partnership between the United States and other countries in which the United States moves factories overseas to foreign workers. Through outsourcing, the Unites States provides workers overseas with a job. Many of these people are workers of poor countries and without much opportunity in terms of finding a job. This is known as a division of labor. Our policies have been consistent with this goal. The World Bank published a pamphlet called “10 Things You Never Knew About the World Bank.” In it, the World Bank points out that “Our work in over 100 countries is challenging, but our mission is simple: to help reduce poverty. Over the past 20 years the proportion living in poverty in the developing world fell by half –from 40 percent to 21 percent.” This demonstrates how extensively the World Bank’s success in ending poverty has been. This is a legacy that the World Bank will only build on as it continues its work into the future.
There is a misconception that most of the outsourced jobs are going to cheap labor so that the United States can take advantage of foreign workers for lower pay. In fact, a lot of the jobs that are being outsourced are for high skilled positions that require use of technology and direct communication with consumers. An example of this are the jobs in medical research, in areas like radiology, drug discovery and testing, and clinical trials, that are going to India. This is having a positive effect in India, as the education system is being vamped up to produce workers capable of filling these positions. Sarosh Kuruvilla, a professor at Cornell, said “Given the established link between investment in capital and economic growth, developing countries have a strong interest in fostering continuous skills improvement…The key implication for Indian workforce development is a major reform in its higher education system to produce more and better researchers, scientists, and engineers. This involves wholesale rethinking of higher education, not just small-time tinkering.” Other high skilled jobs that are being outsourced are jobs in software development and graphic design and, according to an article in “Outsource Portfolio”, more companies are sending high skilled IT jobs like application development and project management overseas. In order to accommodate these kinds of positions, third world countries are improving their workforce through education. This benefits the worker immensely, as it will put the worker on a more even keel with other workers worldwide. From this success comes larger salaries, which contributes to the economies of third world countries. Furthermore, this trend will continue as these high-skilled workers will be able to pay for their children to be well educated. This cycle will continue, resulting in a more educated populace. It is true that some of the jobs outsourced are also targeted at low skill labor and that they are being paid less than workers in the United States would be, so companies in the United States do save money by outsourcing. But the wages that are being paid to these workers are livable wages. Developing countries have lower costs of living, so the workers of these countries do not need a United States-level income. They are easily able to survive on what we pay them. Outsourcing benefits many people on many levels –companies save money, workers in developing countries get are given jobs, and the economies of developing countries prosper.
Outsourcing has become an integral part of the U.S. economy and one would be hard-pressed to find a way to reverse this practice. As Mark Thornton, an economist, points out, “If we were to reverse this form of outsourcing, the U.S. economy would be dealt a major blow. Prohibiting any new foreign outsourcing would also be a big blow to the economy and our future. There have been several suggestions for curtailing foreign outsourcing involving regulations and changes in the tax code, but most of these would have the effect of stopping most foreign outsourcing altogether…Putting limits on foreign outsourcing will make the U.S. a less desirable location for employers and would put American companies at a disadvantage compared to foreign competitors in Europe and Japan, who can continue to rely on the low-cost advantages of foreign outsourcing. As such, the ability to outsource work to other countries is crucial for both new job creation and saving current American jobs from foreign competition.” Discontinuing outsourcing would not only be detrimental to companies within the US, but also for the workers and economies of developing countries. If outsourcing is discontinued, those workers who are currently employed would be out of a job, which would be bad for them on an individual level as they will struggle to find a way to make a living. Some may even have families depending on the money that they bring home to buy necessities like food and clothing. Ending outsourcing would also hurt the economies of third world countries. Workers with less income means fewer people contributing as consumers. This is why we cannot stop outsourcing.
Furthermore, outsourcing is not the demon it’s made out to be. An article published by Tim Kane, Brett Schaefer, and Alison Acosta Fraser, points out ten myths of outsourcing. The first myth is that America is losing jobs. Their response to this myth is: “There are 138.3 million workers in the U.S. economy today –more than ever before.” They also addressed the fear that unemployment is increasing. They refute this by pointing out the “surging labor force…There are now 2.03 million more people in the labor force than in late 2001.” We are currently seeing an unprecedented number of people in the workforce and that workforce is continuing to grow. Outsourcing is not taking jobs away from Americans. Myth #3 is “Outsourcing will cause a net loss of 3.3 million jobs.” In fact, as Kane points out, “Outsourcing has little net impact, and represents less than 1 percent gross job turnover.” And, as we stated before, the job force has never been larger. Myth #4 is that “Free trade, free labor, and free capital harm the U.S. economy.” Kane’s answer to this is: “Economic freedom is necessary for economic growth, new jobs, and higher living standards…a strong positive relationship between economic freedom and per capita GDP.” An outsourced job is not a job lost, according to Kane because “Outsourcing means efficiency. Outsourcing is a means of getting more final output with lower cost inputs, which leads to lower prices for all U.S. firms and families. Lower prices lead directly to higher standards of living and more jobs in a growing economy.” Also, outsourcing is not a practice carried on exclusively by the U.S. In fact, other countries are bringing jobs into the U.S. through outsourcing. “The number of jobs coming from other countries to the U.S. (jobs “insourced”) is growing at a faster rate than jobs lost overseas. According to the Organization for International Investment, the numbers of manufacturing jobs insourced to the United States grew by 82 percent, while the number outsourced overseas grew by only 23 percent. Moreover, these insourced jobs are often higher-paying than those outsourced.” Perhaps the most disturbing myth is one that I addressed above –that only greedy corporations stand to benefit from outsourcing relationships. Kane refutes this by saying “Everyone benefits from outsourcing. Outsourcing is about efficiency. As costs decline, every consumer benefits, including those who lose their jobs to outsourcing.”
Outsourcing is a beneficial practice for all parties involved. It is only because of exaggerations and misrepresentations that outsourcing has become misunderstood by many who consider it immoral. On the contrary, to put an end to outsourcing would be counterproductive. Many would suffer: the worker who will be out of a job, developing countries’ economies, and American companies. Through outsourcing, the United States is sending skills (including high skill jobs) to developing countries and through insourcing, the United States is receiving workers from foreign countries. This is an exchange that results in partnerships that help economies stabilize each other. It is because developed countries like the United States have taken the initiative and created the World Bank and IMF that many developing countries have made strives to reduce poverty. These institutions have come to the forefront in regulating worldwide globalization through practices like outsourcing. Considering the financial crisis that we, as a global community are in, it has never been more important to have a forum for communal exchange in resources and wealth.
Works Cited:
Thornton, Mark. "How Outsourcing Creates Jobs." LewRockwell.com. 11 April 2004. 13 May 2009.
Crawford, Franklin. "High-skilled jobs in finance and medical research going to India, study shows." ChronicleOnline. 12 July 2007. 16 May 2009.
Kane, Tim. "Ten Myths About Jobs and Outsourcing." Heritage.org. 12 July 2007. The Heritage Foundation. 16 May 2009.
"High skilled IT and BPO jobs are going offshore."Outsource Portfolio. 4 Nov 2008. 18 May 2009
Stakeholder Position: U.S. Government (World Bank)
The objective of governmental institutions like the World Bank and the International Monetary Fund (IMF) is to provide a globally regulated financial center. Among the most important services that these financial centers provide are loans so that countries that are developing can be more stable economically. The World Bank and IMF have been successful in their efforts. A survey conducted by the BBC indicates that most countries view the World Bank favorably. According to the article, “the global public clearly sees it as positive that there are international institutions that seek to address the problems of poverty and economic instability, and on balances see them doing more good than harm...countries that have been recipients of World Bank loans are particularly positive about the influence. Africans are especially enthusiastic –Kenya (81% rated it positively), Tanzania (79%)...” From this, it is evident that developing countries are truly benefiting from the World Bank’s efforts.
A big part of the efforts of the United States to help developing countries be viable and autonomous is the practice of outsourcing. Outsourcing is a partnership between the United States and other countries in which the United States moves factories overseas to foreign workers. Through outsourcing, the Unites States provides workers overseas with a job. Many of these people are workers of poor countries and without much opportunity in terms of finding a job. This is known as a division of labor. Our policies have been consistent with this goal. The World Bank published a pamphlet called “10 Things You Never Knew About the World Bank.” In it, the World Bank points out that “Our work in over 100 countries is challenging, but our mission is simple: to help reduce poverty. Over the past 20 years the proportion living in poverty in the developing world fell by half –from 40 percent to 21 percent.” This demonstrates how extensively the World Bank’s success in ending poverty has been. This is a legacy that the World Bank will only build on as it continues its work into the future.
There is a misconception that most of the outsourced jobs are going to cheap labor so that the United States can take advantage of foreign workers for lower pay. In fact, a lot of the jobs that are being outsourced are for high skilled positions that require use of technology and direct communication with consumers. An example of this are the jobs in medical research, in areas like radiology, drug discovery and testing, and clinical trials, that are going to India. This is having a positive effect in India, as the education system is being vamped up to produce workers capable of filling these positions. Sarosh Kuruvilla, a professor at Cornell, said “Given the established link between investment in capital and economic growth, developing countries have a strong interest in fostering continuous skills improvement…The key implication for Indian workforce development is a major reform in its higher education system to produce more and better researchers, scientists, and engineers. This involves wholesale rethinking of higher education, not just small-time tinkering.” Other high skilled jobs that are being outsourced are jobs in software development and graphic design and, according to an article in “Outsource Portfolio”, more companies are sending high skilled IT jobs like application development and project management overseas. In order to accommodate these kinds of positions, third world countries are improving their workforce through education. This benefits the worker immensely, as it will put the worker on a more even keel with other workers worldwide. From this success comes larger salaries, which contributes to the economies of third world countries. Furthermore, this trend will continue as these high-skilled workers will be able to pay for their children to be well educated. This cycle will continue, resulting in a more educated populace. It is true that some of the jobs outsourced are also targeted at low skill labor and that they are being paid less than workers in the United States would be, so companies in the United States do save money by outsourcing. But the wages that are being paid to these workers are livable wages. Developing countries have lower costs of living, so the workers of these countries do not need a United States-level income. They are easily able to survive on what we pay them. Outsourcing benefits many people on many levels –companies save money, workers in developing countries get are given jobs, and the economies of developing countries prosper.
Outsourcing has become an integral part of the U.S. economy and one would be hard-pressed to find a way to reverse this practice. As Mark Thornton, an economist, points out, “If we were to reverse this form of outsourcing, the U.S. economy would be dealt a major blow. Prohibiting any new foreign outsourcing would also be a big blow to the economy and our future. There have been several suggestions for curtailing foreign outsourcing involving regulations and changes in the tax code, but most of these would have the effect of stopping most foreign outsourcing altogether…Putting limits on foreign outsourcing will make the U.S. a less desirable location for employers and would put American companies at a disadvantage compared to foreign competitors in Europe and Japan, who can continue to rely on the low-cost advantages of foreign outsourcing. As such, the ability to outsource work to other countries is crucial for both new job creation and saving current American jobs from foreign competition.” Discontinuing outsourcing would not only be detrimental to companies within the US, but also for the workers and economies of developing countries. If outsourcing is discontinued, those workers who are currently employed would be out of a job, which would be bad for them on an individual level as they will struggle to find a way to make a living. Some may even have families depending on the money that they bring home to buy necessities like food and clothing. Ending outsourcing would also hurt the economies of third world countries. Workers with less income means fewer people contributing as consumers. This is why we cannot stop outsourcing.
Furthermore, outsourcing is not the demon it’s made out to be. An article published by Tim Kane, Brett Schaefer, and Alison Acosta Fraser, points out ten myths of outsourcing. The first myth is that America is losing jobs. Their response to this myth is: “There are 138.3 million workers in the U.S. economy today –more than ever before.” They also addressed the fear that unemployment is increasing. They refute this by pointing out the “surging labor force…There are now 2.03 million more people in the labor force than in late 2001.” We are currently seeing an unprecedented number of people in the workforce and that workforce is continuing to grow. Outsourcing is not taking jobs away from Americans. Myth #3 is “Outsourcing will cause a net loss of 3.3 million jobs.” In fact, as Kane points out, “Outsourcing has little net impact, and represents less than 1 percent gross job turnover.” And, as we stated before, the job force has never been larger. Myth #4 is that “Free trade, free labor, and free capital harm the U.S. economy.” Kane’s answer to this is: “Economic freedom is necessary for economic growth, new jobs, and higher living standards…a strong positive relationship between economic freedom and per capita GDP.” An outsourced job is not a job lost, according to Kane because “Outsourcing means efficiency. Outsourcing is a means of getting more final output with lower cost inputs, which leads to lower prices for all U.S. firms and families. Lower prices lead directly to higher standards of living and more jobs in a growing economy.” Also, outsourcing is not a practice carried on exclusively by the U.S. In fact, other countries are bringing jobs into the U.S. through outsourcing. “The number of jobs coming from other countries to the U.S. (jobs “insourced”) is growing at a faster rate than jobs lost overseas. According to the Organization for International Investment, the numbers of manufacturing jobs insourced to the United States grew by 82 percent, while the number outsourced overseas grew by only 23 percent. Moreover, these insourced jobs are often higher-paying than those outsourced.” Perhaps the most disturbing myth is one that I addressed above –that only greedy corporations stand to benefit from outsourcing relationships. Kane refutes this by saying “Everyone benefits from outsourcing. Outsourcing is about efficiency. As costs decline, every consumer benefits, including those who lose their jobs to outsourcing.”
Outsourcing is a beneficial practice for all parties involved. It is only because of exaggerations and misrepresentations that outsourcing has become misunderstood by many who consider it immoral. On the contrary, to put an end to outsourcing would be counterproductive. Many would suffer: the worker who will be out of a job, developing countries’ economies, and American companies. Through outsourcing, the United States is sending skills (including high skill jobs) to developing countries and through insourcing, the United States is receiving workers from foreign countries. This is an exchange that results in partnerships that help economies stabilize each other. It is because developed countries like the United States have taken the initiative and created the World Bank and IMF that many developing countries have made strives to reduce poverty. These institutions have come to the forefront in regulating worldwide globalization through practices like outsourcing. Considering the financial crisis that we, as a global community are in, it has never been more important to have a forum for communal exchange in resources and wealth.
Works Cited:
Thornton, Mark. "How Outsourcing Creates Jobs." LewRockwell.com. 11 April 2004. 13 May 2009
Crawford, Franklin. "High-skilled jobs in finance and medical research going to India, study shows." ChronicleOnline. 12 July 2007. 16 May 2009
Kane, Tim. "Ten Myths About Jobs and Outsourcing." Heritage.org. 12 July 2007. The Heritage Foundation. 16 May 2009
"High skilled IT and BPO jobs are going offshore."Outsource Portfolio. 4 Nov 2008. 18 May 2009
Exploited by Nike: A letter from a factory worker in Vietnam
Jane Rogers
Stakeholder Position: Nike Factory Worker
I do not know what to do about the issues I am having in life besides write about them and explain to you through words.
I grew up in a small town on the eastern side of Vietnam. I was born into a life with nothing. I had no clothes to change into when mine became dirty. I had no time to make friends or get to know my ancestry because I had to begin work at a young age if I wanted to survive. The work on the farm down the road from my home in Vietnam was tough and miserable, but I was taught that without the pay I would have less than nothing, if that was even possible.
I am the youngest of three children in my family. When I was seven years old my eldest sister left working on the farm to do ‘better things’ according to my parents. I was told that she had an opportunity offered to her that could improve her life as well as our family’s in the future, but I was never told any details.
Due to her newly found job I did not see her very much from that point on, and a year later I was informed of her death. It was discovered through word of mouth that her boss at work had made her and 51 other female workers run two and a half miles around the shoe factory in which they were working because two of the employees had worn their outdoor shoes inside (Campaign, 1997). My sister that I loved and missed already suffered in the heat and was not able to recover. I now have to face the reality that I am now the youngest of two siblings.
After my sister passed away the work on the farm became more tedious and demanding for my brother and I. The following year I was told that it was time for me to get a better job working in a shoe factory in town instead of staying on the farm. I was uneasy about the idea at first but with so many people in my life influencing me there was no way I would be able to turn down an offer that was believed to better my life.
I traveled the distance to Dong Nai, Vietnam alone where I began working for a shoe company called Nike at the Pouchen factory in 1996. Due to the long distance between my home and the factory, housing was provided. I currently live with the 13,000 other employees that live too far away to walk to work (Pou Chen and Nike, 2000). I began my factory career with the idea in my mind that I would be paid better than on the farm and experience a more enjoyable job, both of which I have learned were incorrect assumptions.
At first I was excited for my new job because I could sit next to the other women and young girls working and make friends while making money at the same time. Soon I learned that in order for me to leave at the end of a long days work I was required to make a specific quota (Nike Boycott, 2004), and if I did not meet the given quota I was forced to remain in the factory working without any compensation for my overtime work (Campaign, 1997). The days in the factory became more and more tiring and stressful. Over the course of the last 13 years I have trained my body that I cannot use a restroom more than once in an eight hour work shift, nor can I get a drink of water more than two times during my shift (VN Fact Sheet, 1997). I did not understand these rules at first, but I think I have simply forced myself to believe that there is good intention behind them because if I do not I am punished. I am aware of the sexual and physical abuse that has been occurring (VN Fact Sheet, 1997), and I refuse to do anything to cause myself to become a victim. Other forms of punishment to employees who misbehave that I have witnessed are standing in the direct sunlight for long periods of time, cleaning the bathroom facilities and floor in the factory, writing down a mistake that was made repetitively and kneeling on the floor with our arms in the air for hours (Campaign, 1997).
The pay I am receiving is $1.60 a day for the time I put in at the factory or 20 cents an hour (Third World Traveler). The average cost of three meals a day here in Vietnam is $2.00 so I am needing to borrow money from my family members outside of the factory. I have been raised in a way that has taught me not to ask for help and to make a life on my own so I find myself frequently skipping my meals and working overtime instead. I have recently been working an average of 40 hours overtime each week because I simply cannot survive on the pay I receive in the factory unless I nearly double my given hours in overtime.
I arrived at the Pouchen factory at age nine and I am now 22 years old. Throughout the years I have experienced many different positions inside the factory due to temporary replacements needed. The worst position that I worked in the factory was mixing the large barrels of glue used in the process of making the shoes. I was not given any breathing mask to wear nor was I in a well ventilated area (Pou Chen and Nike, 1997). The strong smell of this glue was so terrible that I used both of my water breaks and bathroom break to get fresh air before I fainted from the fumes.
My point in writing this letter to you is to inform you about the real conditions that real people are having to live in. This job I have in the factory is no longer a choice but a means of life. If I do not show up to my job on any given day I will be fired and never welcomed back to work. If I quit entirely I will not be able to find another job because they are all taken here in Vietnam by other individuals trying to survive. I am aware that the owner of the Nike shoe company that I am working for is wealthy for the average American as well as his company. My plea to any and all people that come across this letter is that you will at the least make an attempt to influence Nike’s decisions on a pay increase for the thousands of labor workers, like myself, living as slaves.
I wish that I did not have to ask for help because I have been raised not to, which is why I must remain anonymous. I have already lost my dignity and I cannot afford to lose the respect from my family. I feel as though this respect for working is the only thing in my life forcing me to continue this job.
Works Cited
Nike VN Fact Sheet
http://www.saigon.com/~nike/fact-sheet.htm
Pou Chen and Nike
http://cbae.nmsu.edu/~dboje/nike/pou_chen_and_nike.htm
Campaign for Labor Rights
http://www.clrlabor.org/alerts/1997/nike_worker1.html
Nike Boycott
http://www.saigon.com/~nike/
Third World Traveler
http://www.thirdworldtraveler.com/Boycotts/NikeThird_facts.html
Stakeholder Position: Nike Factory Worker
I do not know what to do about the issues I am having in life besides write about them and explain to you through words.
I grew up in a small town on the eastern side of Vietnam. I was born into a life with nothing. I had no clothes to change into when mine became dirty. I had no time to make friends or get to know my ancestry because I had to begin work at a young age if I wanted to survive. The work on the farm down the road from my home in Vietnam was tough and miserable, but I was taught that without the pay I would have less than nothing, if that was even possible.
I am the youngest of three children in my family. When I was seven years old my eldest sister left working on the farm to do ‘better things’ according to my parents. I was told that she had an opportunity offered to her that could improve her life as well as our family’s in the future, but I was never told any details.
Due to her newly found job I did not see her very much from that point on, and a year later I was informed of her death. It was discovered through word of mouth that her boss at work had made her and 51 other female workers run two and a half miles around the shoe factory in which they were working because two of the employees had worn their outdoor shoes inside (Campaign, 1997). My sister that I loved and missed already suffered in the heat and was not able to recover. I now have to face the reality that I am now the youngest of two siblings.
After my sister passed away the work on the farm became more tedious and demanding for my brother and I. The following year I was told that it was time for me to get a better job working in a shoe factory in town instead of staying on the farm. I was uneasy about the idea at first but with so many people in my life influencing me there was no way I would be able to turn down an offer that was believed to better my life.
I traveled the distance to Dong Nai, Vietnam alone where I began working for a shoe company called Nike at the Pouchen factory in 1996. Due to the long distance between my home and the factory, housing was provided. I currently live with the 13,000 other employees that live too far away to walk to work (Pou Chen and Nike, 2000). I began my factory career with the idea in my mind that I would be paid better than on the farm and experience a more enjoyable job, both of which I have learned were incorrect assumptions.
At first I was excited for my new job because I could sit next to the other women and young girls working and make friends while making money at the same time. Soon I learned that in order for me to leave at the end of a long days work I was required to make a specific quota (Nike Boycott, 2004), and if I did not meet the given quota I was forced to remain in the factory working without any compensation for my overtime work (Campaign, 1997). The days in the factory became more and more tiring and stressful. Over the course of the last 13 years I have trained my body that I cannot use a restroom more than once in an eight hour work shift, nor can I get a drink of water more than two times during my shift (VN Fact Sheet, 1997). I did not understand these rules at first, but I think I have simply forced myself to believe that there is good intention behind them because if I do not I am punished. I am aware of the sexual and physical abuse that has been occurring (VN Fact Sheet, 1997), and I refuse to do anything to cause myself to become a victim. Other forms of punishment to employees who misbehave that I have witnessed are standing in the direct sunlight for long periods of time, cleaning the bathroom facilities and floor in the factory, writing down a mistake that was made repetitively and kneeling on the floor with our arms in the air for hours (Campaign, 1997).
The pay I am receiving is $1.60 a day for the time I put in at the factory or 20 cents an hour (Third World Traveler). The average cost of three meals a day here in Vietnam is $2.00 so I am needing to borrow money from my family members outside of the factory. I have been raised in a way that has taught me not to ask for help and to make a life on my own so I find myself frequently skipping my meals and working overtime instead. I have recently been working an average of 40 hours overtime each week because I simply cannot survive on the pay I receive in the factory unless I nearly double my given hours in overtime.
I arrived at the Pouchen factory at age nine and I am now 22 years old. Throughout the years I have experienced many different positions inside the factory due to temporary replacements needed. The worst position that I worked in the factory was mixing the large barrels of glue used in the process of making the shoes. I was not given any breathing mask to wear nor was I in a well ventilated area (Pou Chen and Nike, 1997). The strong smell of this glue was so terrible that I used both of my water breaks and bathroom break to get fresh air before I fainted from the fumes.
My point in writing this letter to you is to inform you about the real conditions that real people are having to live in. This job I have in the factory is no longer a choice but a means of life. If I do not show up to my job on any given day I will be fired and never welcomed back to work. If I quit entirely I will not be able to find another job because they are all taken here in Vietnam by other individuals trying to survive. I am aware that the owner of the Nike shoe company that I am working for is wealthy for the average American as well as his company. My plea to any and all people that come across this letter is that you will at the least make an attempt to influence Nike’s decisions on a pay increase for the thousands of labor workers, like myself, living as slaves.
I wish that I did not have to ask for help because I have been raised not to, which is why I must remain anonymous. I have already lost my dignity and I cannot afford to lose the respect from my family. I feel as though this respect for working is the only thing in my life forcing me to continue this job.
Works Cited
Nike VN Fact Sheet
http://www.saigon.com/~nike/fact-sheet.htm
Pou Chen and Nike
http://cbae.nmsu.edu/~dboje/nike/pou_chen_and_nike.htm
Campaign for Labor Rights
http://www.clrlabor.org/alerts/1997/nike_worker1.html
Nike Boycott
http://www.saigon.com/~nike/
Third World Traveler
http://www.thirdworldtraveler.com/Boycotts/NikeThird_facts.html
Nike, Inc. should focus on domestic labor and concentrate layoffs to overseas employees.
Stephanie Steiert
Stakeholder: U.S. Nike Employee
In recent decades, there has been a strong tend toward large multinational corporations outsourcing labor and design to overseas manufacturing plants and design companies. The strongest pull for these multinational corporations to do business overseas is the availability of quality labor for cheap. One company well known for overseas outsourcing, specifically in East-Asia, is the Nike Corporation a sporting goods company headquartered in Beaverton, Oregon. While outsourcing provides the consumer with cheaper product and the CEOs with greater profit, it seems unfair that in a recessing economy American jobs should go to low-skilled laborers in third world nations. Instead of allowing layoffs in the Beaverton Headquarters as well as the rest of Nike workers in the United States, Nike should give priority to American workers and focus layoffs to overseas laborers.
Nike, Inc. began in 1958 with track runner Phil Knight and his coach, Bill Bowerman and their similar dream to create the ultimate running shoe. In reality, Nike did not really take off as a booming corporation until the early seventies when seven Olympic marathon runners donned on their Nikes for their races. Nike has managed to keep up with the latest trends in athletics with both their variety of shoes, sportswear, and sporting goods. [Nike Biz: History] Over 7,000 employees currently work at the Beaverton headquarters alone, with more workers spread out over the rest of the United States. [Nike Biz: History] The beginning of Nike’s business began just as mass production in the United States was at its peak and just beginning to be outsourced to developing nations around the world. Development of outsourcing provided big business with cheap labor and allowed American consumers with cheaper products. From the start, Nike tried to focus on quality with its development of running and athletic shoes.
Over the years, Nike has received numerous criticisms for their work in developing nations, specifically the countries of southeastern Asia, such as Vietnam, Indonesia, as well as Mexico. 25,000 employees work for Nike in Vietnam alone because of the cheap labor available there. The minimum wage in Vietnam is only forty two dollars a month and restrictions on child labor and labor conditions are loose. [Ballinger 1997] For these reasons, it seems obvious why a Nike CEO would choose to outsource the production of their product–the cheap manufacturing of the shoe capitalizes the profit for the corporation. Outsourcing cheap labor out places many U.S. employees from their jobs in manufacturing and production plants. The initial shock of job displacement from outsourcing has decreased since the first corporations began outsourcing in the seventies, but the recent economic crisis has ignited more concerns and criticisms surrounding the domestic job loss.
Criticisms about outsourcing are not only about American job displacement, but can also come from human rights organizations who are concerned about child labor and other unfair labor practices. One of the first criticisms of Nike’s labor practices came in the ninety’s with exposure of unfair labor conditions in Vietnam. Reports state that workers in the Vietnamese factories were subjected to both physical abuse as well as sexual molestation. [Ballinger 1997] By outsourcing production labor Nike not only eliminates domestic jobs but also exploits their contracting employees with long work hours, little pay, and the potential for abuse. Since the nineties, Nike has endured many critiques surrounding their labor practices. Nike has put forth the effort of making sure their labor practices are fair by increasing the regulation of outsourced labor and following a strict code of conduct. [Richards 1998] This effort is progressive and helps to eliminate the use and abuse of sweatshop labor, but pays no mind to the thousands of Americans being displaced by outsourced labor. The current economic crisis has only caused more job loss for the Nike Company.
On May 12 in 2009, Nike released the news of having to lay off 1,750 jobs in America with 500 job cuts in the Beaverton headquarters alone, this is a solid five percent of Nike’s global workforce. Decrease in sales on account of the recession caused Nike to establish the cutbacks in spending.
The layoffs are Nike’s first since the exposure of their sweatshop use in the late eighties. [Rogoway, 2009] Domestic workers for Nike are always the first layoffs Nike will perform to maximize use of their budget. Though this may be efficient for the CEOs looking to gain capital, this method does not acknowledge the importance of the workers in the United States being displaced from their jobs by overseas workers.
While outsourcing may help the company capitalize its profit over all, there are many people who are severely hurt by outsourcing. The overseas employees have been subjected to abuse on numerous occasions while the domestic employees have lost thousands of jobs to these exploited workers. It seems the trend of outsourcing is only going to continue to increase, but this is not necessarily a good thing. Nike should take note of the serious economic crisis America is in and make an effort to help Americans by supplying them with secure jobs instead of outsourcing skilled and unskilled labor to countries where labor is cheap and easier to exploit.
Works Cited
Ballinger, Jeff (1997). NIKE DOES IT TO VIETNAM. Multinational Monitor. 18, 21.
Nikebiz: Company Overview: History. Retrieved May 30, 2009, from Nikebiz Web site: http://www.nikebiz.com/company_overview/history/1950s.html
Richards, Bill (1998). Nike to Increase Minimum Age in Asia for New Hirings, Improve Air Quality. The Wall Street Journal. 1.
Rogoway, Mike (2009). Nike will cut 1,750 jobs, including 500 at Oregon headquarters. The Oregonian. May 14, 2009.
Stakeholder: U.S. Nike Employee
In recent decades, there has been a strong tend toward large multinational corporations outsourcing labor and design to overseas manufacturing plants and design companies. The strongest pull for these multinational corporations to do business overseas is the availability of quality labor for cheap. One company well known for overseas outsourcing, specifically in East-Asia, is the Nike Corporation a sporting goods company headquartered in Beaverton, Oregon. While outsourcing provides the consumer with cheaper product and the CEOs with greater profit, it seems unfair that in a recessing economy American jobs should go to low-skilled laborers in third world nations. Instead of allowing layoffs in the Beaverton Headquarters as well as the rest of Nike workers in the United States, Nike should give priority to American workers and focus layoffs to overseas laborers.
Nike, Inc. began in 1958 with track runner Phil Knight and his coach, Bill Bowerman and their similar dream to create the ultimate running shoe. In reality, Nike did not really take off as a booming corporation until the early seventies when seven Olympic marathon runners donned on their Nikes for their races. Nike has managed to keep up with the latest trends in athletics with both their variety of shoes, sportswear, and sporting goods. [Nike Biz: History] Over 7,000 employees currently work at the Beaverton headquarters alone, with more workers spread out over the rest of the United States. [Nike Biz: History] The beginning of Nike’s business began just as mass production in the United States was at its peak and just beginning to be outsourced to developing nations around the world. Development of outsourcing provided big business with cheap labor and allowed American consumers with cheaper products. From the start, Nike tried to focus on quality with its development of running and athletic shoes.
Over the years, Nike has received numerous criticisms for their work in developing nations, specifically the countries of southeastern Asia, such as Vietnam, Indonesia, as well as Mexico. 25,000 employees work for Nike in Vietnam alone because of the cheap labor available there. The minimum wage in Vietnam is only forty two dollars a month and restrictions on child labor and labor conditions are loose. [Ballinger 1997] For these reasons, it seems obvious why a Nike CEO would choose to outsource the production of their product–the cheap manufacturing of the shoe capitalizes the profit for the corporation. Outsourcing cheap labor out places many U.S. employees from their jobs in manufacturing and production plants. The initial shock of job displacement from outsourcing has decreased since the first corporations began outsourcing in the seventies, but the recent economic crisis has ignited more concerns and criticisms surrounding the domestic job loss.
Criticisms about outsourcing are not only about American job displacement, but can also come from human rights organizations who are concerned about child labor and other unfair labor practices. One of the first criticisms of Nike’s labor practices came in the ninety’s with exposure of unfair labor conditions in Vietnam. Reports state that workers in the Vietnamese factories were subjected to both physical abuse as well as sexual molestation. [Ballinger 1997] By outsourcing production labor Nike not only eliminates domestic jobs but also exploits their contracting employees with long work hours, little pay, and the potential for abuse. Since the nineties, Nike has endured many critiques surrounding their labor practices. Nike has put forth the effort of making sure their labor practices are fair by increasing the regulation of outsourced labor and following a strict code of conduct. [Richards 1998] This effort is progressive and helps to eliminate the use and abuse of sweatshop labor, but pays no mind to the thousands of Americans being displaced by outsourced labor. The current economic crisis has only caused more job loss for the Nike Company.
On May 12 in 2009, Nike released the news of having to lay off 1,750 jobs in America with 500 job cuts in the Beaverton headquarters alone, this is a solid five percent of Nike’s global workforce. Decrease in sales on account of the recession caused Nike to establish the cutbacks in spending.
The layoffs are Nike’s first since the exposure of their sweatshop use in the late eighties. [Rogoway, 2009] Domestic workers for Nike are always the first layoffs Nike will perform to maximize use of their budget. Though this may be efficient for the CEOs looking to gain capital, this method does not acknowledge the importance of the workers in the United States being displaced from their jobs by overseas workers.While outsourcing may help the company capitalize its profit over all, there are many people who are severely hurt by outsourcing. The overseas employees have been subjected to abuse on numerous occasions while the domestic employees have lost thousands of jobs to these exploited workers. It seems the trend of outsourcing is only going to continue to increase, but this is not necessarily a good thing. Nike should take note of the serious economic crisis America is in and make an effort to help Americans by supplying them with secure jobs instead of outsourcing skilled and unskilled labor to countries where labor is cheap and easier to exploit.
Works Cited
Ballinger, Jeff (1997). NIKE DOES IT TO VIETNAM. Multinational Monitor. 18, 21.
Nikebiz: Company Overview: History. Retrieved May 30, 2009, from Nikebiz Web site: http://www.nikebiz.com/company_overview/history/1950s.html
Richards, Bill (1998). Nike to Increase Minimum Age in Asia for New Hirings, Improve Air Quality. The Wall Street Journal. 1.
Rogoway, Mike (2009). Nike will cut 1,750 jobs, including 500 at Oregon headquarters. The Oregonian. May 14, 2009.
31 May 2009
Poetry: Workers in Developing Countries
The Factory Girl
From the damp, dirty hallway,
From the long lines of the cafeteria,
From the rumble of the machines and the unbearable factory noise,
The daylight drifts by, the starlight drifts by.
Forever crying on the production line,
The Factory girls endure exhaustion and hardship.
Every peaceful, lonely night,
The factory girl is bursting with long for her village
And she can hear the sweet call of the mountain goat.
She dreams about the soft, warm bend of her mother's arm,
And she can smell the sweetness of the old, secluded garden.
-Nanfei
Like a factory worker
I cut off my long hair
Short to the roots
Mali Zhe saw it
Patted me and said
Oh my, your head is truly ugly
Like that of a factory worker
I became quite sad
Not for my head
But for the factory workers
For the workers who were leaders in all
I was like a real worker
Glanced in the mirror
The reflection of myself in a desperate state
My hair short and messy
My forehead and face adopted a few new lines
The autumn wind encircles me again
Exposes my ever so trend-setting scalp
As it shivers in currents of cold
-Li Wei
From the damp, dirty hallway,
From the long lines of the cafeteria,
From the rumble of the machines and the unbearable factory noise,
The daylight drifts by, the starlight drifts by.
Forever crying on the production line,
The Factory girls endure exhaustion and hardship.
Every peaceful, lonely night,
The factory girl is bursting with long for her village
And she can hear the sweet call of the mountain goat.
She dreams about the soft, warm bend of her mother's arm,
And she can smell the sweetness of the old, secluded garden.
-Nanfei
Like a factory worker
I cut off my long hair
Short to the roots
Mali Zhe saw it
Patted me and said
Oh my, your head is truly ugly
Like that of a factory worker
I became quite sad
Not for my head
But for the factory workers
For the workers who were leaders in all
I was like a real worker
Glanced in the mirror
The reflection of myself in a desperate state
My hair short and messy
My forehead and face adopted a few new lines
The autumn wind encircles me again
Exposes my ever so trend-setting scalp
As it shivers in currents of cold
-Li Wei
26 May 2009
Nike Workers in Vietnam Strike
Striking out
Nike workers ‘just doing it’ for themselves
In early April, 21,000 Vietnamese workers at the Ching Luh factory, which makes Nike sneakers, walked off the job, demanding a 20 per cent pay rise and better food in the company cafeteria. After several days of discussions, the ruling party-controlled trade union brokered a deal for 10 per cent and a promise of better food. This failed to impress angry workers, who blocked the factory gates amid minor scuffles, prompting the Taiwanese managers to keep the factory closed for another few days. Four workers who passed out leaflets urging colleagues to reject the deal were interrogated and detained by the authorities, and 20 leaders of the ‘rejection’ movement were forced to resign, according to the Committee to Protect Vietnamese Workers (CPVW), a group with offices in Poland and Australia.
Nike is the largest indirect employer of Vietnamese workers. Last December, the company said that there had been 10 strikes in its 35 supplier factories; since that time, 31,000 more have gone on strike in two other factories. Indeed, fully 85 per cent of strikes in Vietnam have taken place in factories supplying foreign corporations, according to Government figures. Yet these are supposed to be the ‘best’ workplaces; certified, inspected, monitored and otherwise ‘socially responsible’.
There are no independent labour rights organizations in Vietnam, but despite the possible repercussions, strikes and resistance have become increasingly common. In December, four leaders of the banned United Workers & Farmers’ Organization (UFWO) were convicted for posting to a ‘reactionary’ website, ‘abusing democracy’ and ‘spreading distorted information to undermine the state’. In the export processing zones around Ho Chi Minh City, strikes have gone up by over 400 per cent in the past three years, due mainly to inflationary price rises.
(Read Full Article)
Nike workers ‘just doing it’ for themselves
In early April, 21,000 Vietnamese workers at the Ching Luh factory, which makes Nike sneakers, walked off the job, demanding a 20 per cent pay rise and better food in the company cafeteria. After several days of discussions, the ruling party-controlled trade union brokered a deal for 10 per cent and a promise of better food. This failed to impress angry workers, who blocked the factory gates amid minor scuffles, prompting the Taiwanese managers to keep the factory closed for another few days. Four workers who passed out leaflets urging colleagues to reject the deal were interrogated and detained by the authorities, and 20 leaders of the ‘rejection’ movement were forced to resign, according to the Committee to Protect Vietnamese Workers (CPVW), a group with offices in Poland and Australia.
Nike is the largest indirect employer of Vietnamese workers. Last December, the company said that there had been 10 strikes in its 35 supplier factories; since that time, 31,000 more have gone on strike in two other factories. Indeed, fully 85 per cent of strikes in Vietnam have taken place in factories supplying foreign corporations, according to Government figures. Yet these are supposed to be the ‘best’ workplaces; certified, inspected, monitored and otherwise ‘socially responsible’.
There are no independent labour rights organizations in Vietnam, but despite the possible repercussions, strikes and resistance have become increasingly common. In December, four leaders of the banned United Workers & Farmers’ Organization (UFWO) were convicted for posting to a ‘reactionary’ website, ‘abusing democracy’ and ‘spreading distorted information to undermine the state’. In the export processing zones around Ho Chi Minh City, strikes have gone up by over 400 per cent in the past three years, due mainly to inflationary price rises.
(Read Full Article)
20 May 2009
Nike Job Cuts
Nike will cut 1,750 jobs, including 500 at Oregon headquarters
by Mike Rogoway, The Oregonian
Thursday May 14, 2009, 8:44 PM
Nike delivered Oregon's latest economic nastygram Thursday, announcing plans to lay off 1,750 employees worldwide, including 500 at its headquarters near Beaverton.
The shoe and apparel company has been planning a massive restructuring since February, but today's cutbacks -- 5 percent of the company's global work force -- are even larger than Nike had forecast last winter. Oregon will be especially hard hit, with more than 7 percent of the 6,800 workers at Nike headquarters losing their jobs.
(Read Full Article on OregonLive.com)
18 May 2009
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