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.
