From: Rich Cree
Sent: January 04, 2007
To: Ann Grackin
Subject: Low Cost Goods Does Not Mean Low Cost Labor
For years the NIKE's chairman has said that Americans and rich countries couldn't make athletic shoes economically. In Business Week a few years ago, I saw an article how New Balance had set up a plant in the Northeast paying an average of $14 per hour to make athletic shoes. By using technology, New Balance was able to make a pair of athletic shoes within $2 of the cost of making shoes in China. No shipping costs were factored into this cost as well as no shipping lag times for time to market for hot new products and no theft of designs and supply chain information. You worry about risk---how many other production situations are like this athletic shoe production example, but for the illusions or more than likely the laziness of business leaders who don't allow for the analysis of the real costs and the cost of real risks.
Is a Chinese worker's welfare more valued than an American worker? If China wants to play tough on trade or American government and business leaders are unwilling to protect the welfare of American workers, I wonder how sustainable that situation can be? If you want Americans to continue to play this game of transfer of wealth to other countries' workers and the few individuals that own 90% of the assets of this world, I would think that American and developed country workers will need to have a new social contract like the one suggested by Jeremy Rifkin in his book, THE END OF WORK. If business and government want to do stupid or irrational business deals, American and developed country workers should force the economic system to internalize the costs of dislocation for workers and their communities as a result of these government and business decisions.
When is this nonsense going to stop! It seems like business leaders are increasing risk and screwing the developed countries' workers. How much longer will the electorates of these countries put up with stupid and greedy and lazy business leaders? That is the real risk issue.
Rich Cree - email@example.com