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.
