Global Sport Workers KNES 485 Sport and Globalization: Issues of Continuity and Change, Sameness and Difference Module 2 Topic C
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
!!
Global Sport Workers! !!!KNES 485!Sport and Globalization:!Issues of Continuity and Change,Sameness and Difference!
Module 2 Topic C!
Having focused on the movement of sport/athletic labor around the world, we now focus on the flow of sport footwear and apparel industry related employment around the globe.!
Hence, we focus on the distribution and experience of global sport apparel and footwear industry workers, as a reflection of broader trends and relations within the global economy.!
Lecture Outline!!I. Deindustrialization and the Globalizing
Economy: Industrial Decline and Offshoring!
II. Global Commodity Chains: Nike as Post-Industrial Corporation!
III. The New International Division of Sport Industry Labor: The Economics of Offshoring !
IV. The Wages of Sport Industry Sweat: Invisible Workers at the Global Periphery!
!
V. Summary!
!
I. Deindustrialization and the Globalizing Economy:!
Industrial Decline and Offshoring!
Baltimore & Ohio Railroad, 1865!
Carnegie Steel Co. Pittsburgh, 1915!
Ford Motor Company,MI, 1921!
Cotton Spinning Mill, NC, 1908!Coal Miners, WV, 1946!
The U.S. Industrial Era (c. 1880-1970)!
Source: Johnston, J.D. (2012, February 22). History lessons: Understanding the decline in manufacturing. MinnPost. !
69%!
20%!
11%! 11%!
46%!
51%!
78%!
20%!
2%!
Distribution of US Labor Force by Sector, 1840-2010!
!
U.S. DEINDUSTRIALIZATION: The decline of a nation’s industrial manufacturing capacity, and the economic and social effects linked to it.!
The Decline of American Mass Industrialism!
The era of industrial capitalism came to an end during!the 1970s when this form of production became!increasingly expensive (and hence less profitable) due!to: !
1. A rise in labor costs (wages) due to the general increase in living standards within developed economies.!
Levittown, PA!
!2. Increases in production costs due to rises in world!!oil prices caused by the OPEC crisis in early 1970s.!
Oil Prices 1861-2007!OPEC!Crisis:!1973!
The growing cost of industrial production prompted corporations to look to cut costs through: !
OUTSOURCING: Contracting parts, or the whole, of the manufacturing process to another firm/entity.!!OFFSHORING: Relocating parts, or the whole, of the manufacturing process to another country.!
!3. Growing competition from developing industrial economies!!with significantly lower labor costs, and often less workplace regulation.!
Japan, 1965!Japan, 1966!
Japan, 1967! Japan, 1963!
!4. The reduction in trade barriers between the U.S. and other
countries, allowed American manufacturers access to foreign markets, and to relocate/outsource/offshore manufacturing (and increasingly services) overseas.!
OUTSOURCING and OFFSHORING reduces manufacturing costs in the following ways:!
1. Lower Investment Costs: A corporation no !longer has to pay for manufacturing plants and !facilities. !
!2. Lower Operation Costs: The raw materials, and
energy sources required for manufacturing are no longer the responsibility of the corporation.!
3. Lower Labor Costs: Offshore production location in developing economies with wage structures and expectations.!
Cumulative U.S. Jobs Exported Overseas!
Source: Guinness, P. (2011). Geography for the IB diploma. Cambridge: Cambridge University Press.!!
Offshoring Attractiveness!
!!!!According to Ohmae, the transnational economy is a:!!“borderless world” since “Capital has no home country”!!
Source: Ohmae, K. (1990). The borderless world. New York: HarperBusiness.!
The Rise of China as an Industrial/Economic Force!
Source: Guinness, P. (2011). Geography for the IB diploma. Cambridge: Cambridge University Press.!!
!
II. Global Commodity Chains:! Nike as Post-Industrial Corporation!
“it is a world of industrialism and its long-standing imagery that we are leaving behind--the modern factories in an urban setting, the heavy machinery and the ever-present noise, along with the massed ranks of workers in overalls. In its place, we are told that we have entered a post-industrial era; one that is characterized by information technologies and networked offices rather than by coal or steam power and sprawling workshops. !
Source: Allen, J. (1992). Post-industrialism/post-Fordism. In S. Hall & D. Held & D. Hubert & K. Thompson (Eds.), Modernity: An introduction to modern societies (pp. 534). Oxford: Blackwell. !
The Rise of the New Post-Industrial Economy!
Physically Based “Hard Labor”, 1940s!
Information Based “Think Work” and Service Work, 1990s!
The shift from industrial to post-industrial production witnessed a transformation from “dirty” to “clean” technologies as (digital) information became a key source of energy in the “new economy.”!
Blue Collar America! White Collar America!
Changing Energy Sources/Motors of Economic Production!
Dirty Technologies!
Clean Technologies!
Industrial Capitalism!
Post-Industrial Capitalism!
Coal/Stream!
Electric!
Oil!
Atomic/Nuclear!
Digital Information!
Informational economies are more cost effective because they!require considerably less investment in MASS labor costs.!
Physical Production ! !Symbolic Production!
Material Goods! ! !Symbolic Meanings!
Mechanized Industries New Culture Industries!
Material Resource ! ! ! !Information Resource Based ! ! ! ! !Based!
Brands!Commodities!Post-Industrial era!Louis Vuitton!socks!
Industrial!era !
socks!
Industrial !Corporation!
Post-Industrial!!Corporation!
“For years, we thought of ourselves as a production-oriented company, meaning we put all our emphasis on designing and manufacturing the product. But now we understand that the most important thing we do is market the product. We've come around to saying that Nike is a marketing-oriented company, and the product is our most important marketing tool”!!!!
Post-Industrial Nike!
Source: Phil Knight, then Chairman and CEO, Nike Inc., quoted in Willigan, G. E. (1992). High performance marketing: An interview with Nike's Phil Knight. Harvard Business Review(July/August), 91-101.!
Industrial !Corporation!
Post-Industrial!!Corporation!
Physical Production ! !Symbolic Production!
Material Goods! ! !Symbolic Meanings!
Mechanized Industries New Culture Industries!
Material Resource ! ! ! !Information Resource Based ! ! ! ! !Based!
Brands!Commodities!
Industrial !Football!
boots!
Post-Industrial!Nike Magista boot (and David Luiz)!
Fiscal year 2014, Nike total revenues of $27.79 billion generated $3.54 billion in pre-tax income. !!Demand creation expenses (advertising, promotion, and endorsement costs) of $3.03 billion.!
Source: www.investors.nikeinc.com!
Post-Industrial Nike!
The Spatial Re-Location of Industrial Production!
This speaks to the POST-INDUSTRIAL transformation in CORE/developed economies, and the emergence of a NEW INTERNATIONAL DIVISION OF LABOR.!
1968:!We make stuff...!
1978:!We have others!make our stuff…!
1988:!We allow others!to have others!make our stuff…!
1998:!We make websites !for others who have !others make our stuff…!
Global Commodity Chains!
!“a network of labor and production processes whose end result is a finished commodity”!!!!!!
Source: Hopkins, T. K., & Wallerstein, I. (1994). Commodity chains: Construct and research. In G. Gereffi & M. Korzeniewicz (Eds.), Commodity chains and global capitalism (pp. 17-19). Westport: London.!
Changing [Global] Commodity Chains!
DESIGN! RAW MATERIALS! MANUFACTURING! DISTRIBUTION! MARKETING!
ADVERTISING! RETAIL!
Industrial/National Corporation (up to c. 1970)!
Corporation responsible for all nodes of the commodity chain.!
RETAIL!
DESIGN! RAW MATERIALS! MANUFACTURING! DISTRIBUTION! MARKETING!
ADVERTISING!
Post-Industrial/Transnational Corporation (c. 1970 onwards)!
Corporation focuses on less labor intensive nodes of commodity!chain; focuses more on nodes involving various forms of information !processing; outsourcing of production to developing economies with !lower labor costs. !
An Electronics Industry Global Commodity Chain!
The Lego Global Commodity Chain!
The Nutella Global Commodity Chain!
Nike exemplifies the spatially decentered post-industrial corporation, through its truly global commodity chain, which is divided accordingly: !
Knowledge and cultural!production at the global !economic CORE (US and Europe)!
Mass industrial production !at the global economic !PERIPHERY (South East Asia)!
Design!Advertising!Marketing!Retail!
Raw Materials!Manufacturing!Distribution!
RETAIL!
DESIGN! RAW MATERIALS! MANUFACTURING! DISTRIBUTION! MARKETING!
ADVERTISING!
Nike’s Post-Industrial Commodity Chain!
Corporation focuses on less labor intensive nodes of commodity!chain; focuses more on nodes involving various forms of information !processing; outsourcing of production to developing economies with !lower labor costs. !
Nike’s Global Product Information Flow!
1!2!
3!
4!
5!
6!
1. Nike World Campus: Beaverton, OR (Research/Design/Production Information)!2. Taiwan; 3. South Korea; 4. Thailand; 5. China; 6. Indonesia; 7. Vietnam; 8. India; 9. Bangladesh (Production Source)!
7!8! 9!
Product Information
Flow�
Nike’s Global Specialty Component Flow!
1!2!
3!
4!
5!
6!
1. Nike World Campus: Beaverton, OR (Research/Design/Production Information)!2. Taiwan; 3. South Korea; 4. Thailand; 5. China; 6. Indonesia; 7. Vietnam; 8. India; 9. Bangladesh (Production Source)!
7!8! 9!
Specialty Component
Flow�
Nike’s Global Product Distribution Flow!
1!2!
3!
4!
5!
6!
1. Nike World Campus: Beaverton, OR (Research/Design/Production Information)!2. Taiwan; 3. South Korea; 4. Thailand; 5. China; 6. Indonesia; 7. Vietnam; 8. India; 9. Bangladesh (Production Source)!3. Regional Distribution Centers!!
7!8! 9!
Product Distribution
Flow�
Nike’s Global Inventory Information Flow!
1!2!
3!
4!
5!
6!
1. Nike World Campus: Beaverton, OR (Research/Design/Production Information)!2. Taiwan; 3. South Korea; 4. Thailand; 5. China; 6. Indonesia; 7. Vietnam; 8. India; 9. Bangladesh (Production Source)!3. Regional Distribution Centers!!
7!8! 9!
Inventory Information
Flow�
Nike’s Global Product Information Flow!
1!2!
3!
4!
5!
6!
1. Nike World Campus: Beaverton, OR (Research/Design/Production Information)!2. Taiwan; 3. South Korea; 4. Thailand; 5. China; 6. Indonesia; 7. Vietnam; 8. India; 9. Bangladesh (Production Source)!3. Regional Distribution Centers!!
7!8! 9!
Product Information
Flow�
Nike thus exemplifies the concept of the globally networked post-industrial corporation: A spatially decentered entity which possesses the technological capacity:!
“to work as a unit in real time on a planetary scale”!
Source: Castells, M. (1996). The rise of the network society (p. 92).Oxford: Blackwell.!
!
III. The International ! Division of Sport Industry! Labor:! The Economics of Offshoring!
Within the post-industrial economic system, the division of labor is spread between different countries, different hemispheres even.!!Different types of work are carried out, and very different financial rewards are earned, by material workers in developing (PERIPHERY) nations and knowledge and cultural workers in developed (CORE) nations. !!
The Corporate Capitalist World-System!
Developed CORE!“Consumer” Economies!
Developing [SEMI]PERIPHERY!“Producer” Economies!
The New [Post-Industrial] International Division of Labor!
USA!
Developed CORE!“Consumer” Economies!
Developing [SEMI]PERIPHERY!“Producer” Economies!
Northern !and Western Europe!
Japan!
Australia!and New Zealand!
Central and!South America!
Canada!
India!South !East Asia!
South Africa!
Eastern Europe!North Asia!
Nike’s Global Workforce!
Source: Banjo, S. (2014, April 21). Inside Nike's Struggle to Balance Cost and Worker Safety in Bangladesh. The Wall Street Journal. !
A New International Division of Labor and Wealth!
!!!
Knowledge and cultural!production at the global !economic CORE!
Producing consumption!within developed economies!
Highly developed and rewarding wage structure!
Mass industrial production !at the global economic !PERIPHERY!
Producing goods for!developed economies!
Little more than subsistence wages!
Nike’s Evolving Supply Networks/Flows!
Japan/USA!
Vietnam/Cambodia !
Search for ever!cheaper labour!costs!
Korea/Taiwan!
China/Thailand/Indonesia!
Desire for !increased!rates of profit!
1970s!
2010s!
1970s!
2010s!
Africa?/South-Central America?!
Nike exemplifies the manner in which!post-industrial, global, corporations act as form of:!!!“footloose capital searching the globe for competitive advantage”!!!!!!Source: Thompson, G. (2000). Economic globalization? In D. Held (Ed.), A globalizing world? Culture, economics, politics (pp. 85-126). London: Routledge.!
Nike Inc. Fiscal Year 2014: FOOTWEAR!
Source: www.investors.nikeinc.com!
Supplied by 150 factories located in 14 countries.!!“Virtually all” footwear manufactured outside the U.S. by independent contract manufacturers who often operate multiple factories. !
Country of Manufacture!
Percentage of Nike Brand Footwear!
Vietnam! 43%!China! 28%!Indonesia! 25%!
Independent factories in Argentina, Brazil, Mexico, and India manufacturing footwear primarily for sale in those countries.!
Nike Inc. Fiscal Year 2014: APPAREL!
Source: www.investors.nikeinc.com!
Supplied by 430 factories located in 41 countries.!!“Virtually all” apparel manufactured outside the U.S. by independent contract manufacturers who often operate multiple factories. !!
Major Sites of Nike Brand Apparel Manufacture!China! Indonesia!Vietnam! Sri Lanka!Thailand! Pakistan!Malaysia!
The top five contract manufacturers accounted for 34% of Nike brand apparel.!
In order to further understand the global economics of the sport shoe industry, it would be instructive to consider the distribution of costs along various parts of the Nike footwear commodity chain.!
Source: Locke, R. M. (2006). Promise and Perils of Globalization: The Case of Nike. MIT Case Study.!!
Nike Air Pegasus: $70 Cost Breakdown!
Nike Air Pegasus: Marketing Cost - $15.50 (22.1%)!
$5 (32.25%) !
$4 (25.8%)!
$0.25 (1.6%)!
$6.25 (40.32%!
0!
5!
10!
CO
ST $!
Sales/!Distribution/ Administration!!
Promotion/ !Advertising!
Research/!Development!
Nike’s Operating!Profit!
Source: Pearlstein, S. (1995, June 13). Body watch: Sizing it up: Why it costs what it costs. The Washington Post. !
Nike Air Pegasus: Retailing Cost - $34.50 (49.3%)!
$9.50 (27.53%)!$9.00 (26.08%)!
$7.00 (20.29%)!
$9.00 (26.08%)!
0!
5!
10!
Personnel! Rent! Other! Retailer's Operating Profit!
CO
ST $!
Source: Pearlstein, S. (1995, June 13). Body watch: Sizing it up: Why it costs what it costs. The Washington Post. !
Nike Air Pegasus: Production Cost - $20 (28.6%)!
$9 (45%)!
$3 (15%)! $3 (15%)! $2.75 (37.5%)!
$1.75 (8.75%)!
$0.5 (2.5%)!
0!
5!
10!
Mat
eria
ls!
Dut
ies!
Ren
t/Equ
ipm
ent!
Prod
uctio
n La
bor!
Supp
lier's
Ope
ratin
g Pr
ofit!
Ship
ping!
CO
ST $!
Source: Pearlstein, S. (1995, June 13). Body watch: Sizing it up: Why it costs what it costs. The Washington Post. !
So, the production labor costs for the $70 Nike Air Pegasus were $2.75.!!However, this does not mean a single worker is paid $2.75 for each pair of shoes produced.!!Rather, the production labor costs are shared between the numerous workers whose labor goes in to making each pair of shoes.!
Air Max Penny:!!52 different components, from 5 different countries, touched by 120 pairs of hands over the manufacturing process.!
Source: Anon. (1996, August 29). The Post-National Economy: Goodbye widget, hello Nike. Far Eastern Economic Review.!
Average Hourly Wage for Garment Workers (2013) !
Bangladesh $.24 !Cambodia $.45 !
Pakistan $.52 !Vietnam $.53 !China $1.26!
Examples of Nike’s Overseas Labor Costs!
2014 - Chinese workers paid $1.67 per hour !!2013 - Indonesian workers paid $3.70 per day!!2013 - Cambodian workers paid $40 per month!!
Source: Barber, E. (2013, June 12). Some 300 Cambodian Nike workers fired after protests. The Christian Science Monitor.!
Arguments FOR the OFFSHORING of Sporting !Goods Production !
• American workers uncompetitive salary expectations!
• Low labor costs keep retail costs low to appeal to CORE consumers!
• Providing PERIPHERY poor with regular income!• Workers get more than national average wage!• Wages contribute to economic and social
development of society!• Factories implement and enforce codes of
conduct !
According to Powell (2014), SWEATSHOPS:!!- Part of a national
development process that leads to better economic and social conditions!
- Sweatshop wages improve standard of living!
- Improves the lives and opportunities for women!
!
IV. The Wages of Sport Industry Sweat:!
Invisible Workers at the Global ! Periphery!
Global corporations have relocated production to developing nations because:!
- the standard of living (hence cost of !wages) is extremely low.! !-workplace regulations are in no way!as stringent as in the developed world.!!!
-it is common practice to hire female and child labor on extremely low wages.!!All of which allows companies to make considerable savings on their labor costs, and thereby keeps prices attractive to consumers in the developed world.!
Sweatshop Labor/Manufacture!
- relatively low skilled, repetitive work!- workforce female dominated!- poorly paid!- long hours, forced overtime!- often physical and/or sexual harassment!- unsafe and/or cramped working conditions!- little or no union representation!
Invisible [Workers] BODIES!
See Video Clip 1!
Panorama (2000): Nike, Gap, No Sweat?!
“Fourteen-year-olds, from Bangladesh to the Mexican maquila, working fourteen-hour days in factories that reek of toxic fumes; young women supporting families on some twenty cents an hour; factory managers who forbid sick workers time off to go to the doctor; bosses in El Monte, California and elsewhere who have, quite literally, turned factories into prisons, forcibly detaining workers in sweatshops surrounded by barbed wire”!
Source: Featherstone, L., & U.S.A.S. (2002). Why a student movement against sweatshops, Students against sweatshops (p. 1). London: Verso.!
August 2010!
Source: www.nikeresponsibility.com/report/!
Source: www.nikeresponsibility.com/report/!
Source: www.nikeresponsibility.com/report/!
See Video Clip 2!
Are Nike Workers Paid a Living Wage? (2013)!
Source: Workers Rights Consortium (2013, July). Global Wage Trends for Apparel Workers, 2001–2011. Center for American Progress. !
+!
+!
+!
+!
+!
Source: Workers Rights Consortium (2013, July). Global Wage Trends for Apparel Workers, 2001–2011. Center for American Progress. !
Apparel Workers Prevailing Wage as Percentage of Living Wage, 2011!
Benetton, Walmart, The Children’s Place subcontracted manufacturing. Unsafe building, warnings ignored, garment workers forced to return to building the day before it collapsed.!
Rana Plaza building collapse, Bangladesh April 2013, 2,129 killed �
See Video Clip 3!
The Offshoring Dallas Cowboys!
Arguments AGAINST the OFFSHORING of Sporting !Goods Production !
• Paying little more than subsistence wages!• Forced overtime !• Regular use of child labor!• Unregulated/anti-union workplaces!• Health and safety violations!• Verbal, physical, sexual harassment/abuse!• Violation of workers’ human rights!• Few inspections/monitors!
The Anti-Nike Backlash!
Of course, its not just Nike…!
Global Child Labor!
“The International Labour Organization (ILO) estimates that there are 250 million children between the ages of 5-14 working in least developed countries (LDCs). Half of them work full time and one third work in extremely dangerous conditions.” !
Source: http://www.takingitglobal.org/express/article.html?cid=610!
!"I have been stitching footballs for as long as I remember,"confided Geeta, a young girl from Jalandhar who estimated her age to be between 10 and 12 years. "My hands are constantly in pain. It feels like they are burning. There is nothing I can do I have to help my older sister complete the order."!
Source: http://store.amnesty.ie/home/footballs.htm!
Child labor denies children their basic human rights “to be children” through denying their access to basic:!
EDUCATION RECREATION !
HEALTH!!
Child Labor and Global Soccer Ball Production!
Soccer Ball Production!
Sources: International Labour Organization: http://www.indianet.nl/iv.html!!
10,000+ children stitching footballs in India!!15,000+ children stitching footballs in Pakistan!!Unknown number of child workers in new production sites, Asia and South America.!! !
Jalandhar and Meerut:!Centers of the Indian Soccer Ball Production Industry!
Source: Bachpan Bachao Andolan (n.d.). Child labour in football stitching activity in India: A case study of Meerut district in Uttar Pradesh. !
Source: Bachpan Bachao Andolan (n.d.). Child labour in football stitching activity in India: A case study of Meerut district in Uttar Pradesh. !
Source: Bachpan Bachao Andolan (n.d.). Child labour in football stitching activity in India: A case study of Meerut district in Uttar Pradesh. !
Child Labor Activity in Football Stitching!
Source: Bachpan Bachao Andolan (n.d.). Child labour in football stitching activity in India: A case study of Meerut district in Uttar Pradesh. !
Child Labor Activity in Football Stitching!
Source: Bachpan Bachao Andolan (n.d.). Child labour in football stitching activity in India: A case study of Meerut district in Uttar Pradesh. !
"A game that is supposed to inspire youth and entertain the world must not be played with footballs sewn with the sweat of children.”!
Source: http://store.amnesty.ie/home/footballs.htm!
See Video Clip 4!
Aussie Rules Football and Child Labor!
Global Sporting Inequalities and Inter-Connections!
Developed world!child opportunity!
Developing world!child abuse!
Bachpan Bachao Andolan (Save Childhood Movement) !
!
V. Summary!
Source: Timmerman, K. (2012). Where am I wearing? A global tour to the countries, factories, and people that make our clothes. Hoboken, NJ: John Wiley & Sons.!
Global Economic Inter-Connections/Inter-Dependency!
“Developed World”!CORE Consumer!
“Developing World”!PERIPHERY/SEMI- PERIPHERY Producer!
The New [Post-Industrial] International Division of Labor!
USA!
Developed CORE!“Consumer” Economies!
Developing [SEMI]PERIPHERY!“Producer” Economies!
Northern !and Western Europe!
Japan!
Australia!and New Zealand!
Central and!South America!
Canada!
India!South !East Asia!
South Africa!
Eastern Europe!North Asia!
Now move on to the required readings, online discussion, and topic assignment for this topic…!
Related Documents
