Globalization and Running: how much would shoes be if they weren't made by a 9 year old in Thailand?

They would be exactly as expensive as the more expensive end of New Balance's line. The NB shoes that sell for more than $110 or so are made domestically.

WWIII will start soon and running will NOT be as critical as DEW-announcements and listening for your local fire station CD-siren to let you know a chem-bio attack is imminent.

Not to worry...start drinking.

Globalization will be 'way at the bottom of your list of concerns.

that's reassuring, dude

thanks

Nike does not have slaves (as in your statement that childrens parents have sold them into slavery). If you know of an instance of Nike employing slave labor, I'd be interested to hear it. They do employ people at low wages. These are wages which both the employer and employee have agreed upon. I'm not saying that they are paid well or that they don't deserve more, but they are certainly not being forced into the job.

You have to think about what you are really hearing when you listen to anti-business groups talk about nike and other such companies. When you read the wage of a worker in dollars, you need to realize that any amount of a weak currency reported in terms of a strong currency will sound low. Cost of living in these countries in dollar terms is also very low. Again, I'm not saying that Nike is paying people as much as they should, but it isn't as bad as many would like you to believe. Also, you hear about how low the cost of producing a pair of Nike shoes is all the time. This number is of course marginal cost and not averaage cost. It does not factor in overhead. If I build a million dollar factory and then build products that cost a dollar a piece to produce, they would report my cost per unit as $1. Again, I'm not necessarily defending Nike's business practices, but can't take numbers from either side of the argument at face value.

The Prototype Let's Run Post-Globalization Rant

I am so pissed right now. I went to my local running store to get some new shoes and I couldn't believe what they were charging! $140 for a basic neutral model that only lasts about 500 miles!!! I don't care that they were made in America by well paid union workers. I'm a post-collegiate trying to get a Trials qualifier and I shouldn't have to choose between rent or shoes. I asked the manager for a discount and he said he couldn't give me one because his costs went up and he had to stop giving club discounts. He mumbled something about either giving customers 10% off or keeping insurance for his workers or something BS like that.

I tried to get sponsorships but the shoe companies don't do squat anymore. Unless you are already an Olympic medalist, there is no money or gear for you. I know they make less margins and get pressure from investors to cut costs but Wall Street doesn't understand how important good runners are to the country. I mean, we're role models for clean living right?

It's also getting hard to find races too. Remember when local stores sponsored 5Ks all the time? That all dried up when the $140 shoes showed up. Now I have to put $7.00 / gallon gas in my car and drive two hours to find a race in the next big city. It sucks! $80 to drive round trip, $50 to enter, another $20 if I want the union-made organic cotton t-shirt, and then the course was like 200 or 300 meters short! I might well just quit!

Harry,

Yer as stunned as my arse. The reason Nike pays low wages is because it can. Believe me it would pay less if it could. The reason the third world is still the third world is because there are no unions in places like Taiwan or Bangladesh. Add in union wages and the price of a pair of Pegasus hits $250.......a shoe. Do you think Bangladeshi labor likes living 20 to a room in oppressive heat and filth for paltry wages that can barley feed 1 person let alone an extended family of 30? Nike pays crappy wages to the Taiwanese so it can pay Tiger Woods $20million a year. Ain't America great.

...that's why EVERYONE is trying to get into this country.

Well, part of the reason.

Some are coming in to join or link up with sleeper cells that will react if the Shrub is told by Cheney to do another stupid thing like attack Iran.

Some are coming in to spy for China, Iran, Iraq, Venezuela, Cuba, Russia, N. Korea and who knows who else?

"May you live in interesting times" - Ancient Roman Curse

This is true, I couldn't live in the UK on what a lot of places in the US pay their low level earners. It's all about the currency exchange.

Marla,

Oh, my.... You guys need to take economics 101. Currency exchange is irrelevant. The cost of living is low in third world countries because they live in squalor. Squalor is cheap, the rent in a shanty-town ain't as high as a Manhattan apartment or a London townhouse.

Build subdivisions for all the workers and give them Subarus to drive to work in and the cost of living in the third world skyrockets, not unlike the US or other developed countries. The fact that a Nike employee in Taiwan can't afford to buy a refrigerator on what he makes in a year has nothing to do with the cost of refrigerators in Taiwan, it has everything to do with the miniscule wages he is paid.

That's funny, I can't live in the US on what I'm making in the US. I'm thousands of dollars in debt, and it's getting worse every day.

If a shoe factory opened up here in AZ making running shoes, I'd go work there for $10+ an hour. Forget this $140 dollar running shoe business, the companies would find other ways to cut costs (materials, availability) to keep prices close, if not level.

I hate capitalism right now. Talk to you later.

econ 101 is way to simplistic to even begin to understand globalization. its people who thought they understood economics after econ 101 who got us into this mess in the first place. I seriously doubt anyone on here knows what they are talking about, myself included

"the companies would find other ways to cut costs (materials, availability) to keep prices close, if not level."

Stupid comment. Don't you think that Nike, the biggest running shoe company in the world, has not already negotiated the very best price on raw materials? The company making the nylon and leather ain't gonna give it away for free??

Micro-economics class: if you understand it you aren't paying attention.

Harry Kooter wrote:Again, I'm not saying that Nike is paying people as much as they should, but it isn't as bad as many would like you to believe. Also, you hear about how low the cost of producing a pair of Nike shoes is all the time. This number is of course marginal cost and not averaage cost. It does not factor in overhead. If I build a million dollar factory and then build products that cost a dollar a piece to produce, they would report my cost per unit as $1. Again,

The ignorance here and on every other post is astounding! Nike does not build any factories, nor do any factory workers in Asia work for Nike. Nike, like all shoe companies, sub-contract out the work to Asian companies.

Do you have a job?

c* = f(k) - (depreciation + n + g)k

Consumption per worker is the output per worker minus the sum of depreciation, population growth, and technological advance times the amount of capital per worker.

The driving force in this is g, or the technological advances. Without the spread of technology, you'll still be complaining that Nike is Leopold II and these exploited nations are the Congo (which one may in fact be).

On the wages they are currently being paid however, they will be unable to reach their golden rule steady state level of capital per worker because their saving is for our purposes 0.

k* = s f(k) - (depreciation + n + g)k

You will need to equate MPK - depreciation and n + g in order to find this level.

-Joe Walsh

"The ignorance here and on every other post is astounding."

Yer right yourself. Yeah Nike might sub out the work but Nike dictates the margins, production, just like most Western companies operating in the Far East. It's still Nike calling the shots. The puppet sub is just a way to get around foreign direct investment regulations. Plus there are subsidies for native companies but not foreign companies. And if Nike ain't happy with the product they sub it out to another sweat shop.

Ninetonite wrote:

Yer right yourself. Yeah Nike might sub out the work but Nike dictates the margins, production, just like most Western companies operating in the Far East. It's still Nike calling the shots. The puppet sub is just a way to get around foreign direct investment regulations. Plus there are subsidies for native companies but not foreign companies. And if Nike ain't happy with the product they sub it out to another sweat shop.

Nike has market power over dependent regions in these countries and will maximize using the following:

Pi = PQ - wL - cK - FC

Taking partials accordingly, Nike should be paying MPL x L to its workers. This will allow for profit max. They could be using a cost min program, but if the marginal product of labor is in fact their wage, Nike is behaving as a rational employer.

-Joe Walsh

Inefficiency of multiple jobs:

1. Lack of benefits extended to full time workers.

2. Lesser job stability.

3. Varying hours (Can also be seen in manufacturing).

4. Higher probability of being part of the service industry, which traditionally yields lower wages.

5. Travel time between workplaces.