Commentary

Defending Nike

Here at the birthplace of Nike, we accept the generous donations of its founder with all the gratitude of a spoiled child.

BY JOSH GROVE

I'm not exactly sure what the expression "don't look a gift horse in the mouth" means; I believe it has something to do with the horse's teeth. I do know, however, that the periodic outcries against the "corporate takeover" of the University of Oregon by Nike, Inc. have nothing to do with a horse's teeth but, rather, a large number of horse's asses. The people of Eugene now protest against what they perceive as the coming "Nike U." and are given to vandalizing the company's stores. Now, I'm all for a little good natured rioting every now and again, but I draw the line at throwing a few beer bottles at the police and ripping down a street sign or two. Students at the U of O propose that we should limit the size of donations to the school and boycott Nike. They wail and moan about how Nike runs sweatshops in Asia, employs child laborers in South America, and gouges the common man with outrageous markup on their shoes. These people see a few flashy statistics and a little liberal rhetoric and are soon cringing at the Nike swoosh like a fat man at a rice cake.

Note to all horse's asses: Nike is not trying to take over the University of Oregon. Believe it or not, Nike has not donated any money to the U of O. Phil Knight, however, an Oregon alumnus who majored in accounting (and you thought all of those accounting majors would never amount to anything but pencil pushing lackeys), has donated millions of dollars to his alma matter. Unlike the donations that President Clinton received from contributors in Red China, Knight does not expect anything in return. All he wants is to have his name plastered on a couple of buildings around campus, and we get a boatload of money. I'm sure that almost every student has taken advantage of the library that Knight helped fund, and his recent $25 million donation created 30 new endowed chairs and aided the construction of the new law building. Without donations from Phil Knight and others like him, one of two things could happen: One, the University could have inferior facilities and professors and, in general, be a much worse place to go to school. Or two, we could be paying a lot more to go to school here. Take your choice.

Here is another amazing fact for those equine posteriors out there: Nike does not make shoes. It does design shoes and market shoes, but they do not manufacture shoes. The manufacturing is done by outside contractors, which are almost exclusively Asian companies operating out of poor countries such as Vietnam or Indonesia. Nike contracts with over 150 factories which employ over 450,000 people. Opponents might argue that Nike must take responsibility for who they do business with, and they do. Nike has an extensive code of conduct that outlines the policies it expects its suppliers to comply with. There have been a couple of highly publicized instances of disregard for this code of conduct, but two or three out of 150 is not a bad ratio. Do we expect every company whose products we purchase to account for the ethics of its suppliers? Almost all of the other large shoe companies also contract out their production to Asia; many are even manufactured side-by-side, in the same plant, with Nike shoes. Yet I have never seen anyone walking around campus with a "Boycott Reebok" sign.

It is true that the workers in these shoe manufacturing plants earn as little as 20 cents an hour and often work long hours in grueling conditions. Why, you may ask, don't these poor workers see how badly they are being treated and demand better conditions or walk out? Are they merely gluttons for punishment? Well, I don't believe that there are 450,000 masochists working in these plants. The fact is that these people want these jobs because these jobs are much better than any other option they have. The countries in which these shoe manufacturers are operating are basically third world countries. While we in the United States experienced our Industrial Revolution 150 years ago, these countries are just beginning to go through theirs. Societies that are in the early stages of economic development do not have all of the opportunities or benefits that we enjoy in this country. The people there are trying to keep themselves alive, not save up for a new jet ski or a vacation to the Bahamas.

Shoe manufacturers provide a stepping stone for economic expansion within these developing countries. After the labor force has begun to develop through the production of lower level goods, such as shoes and textiles, other more sophisticated, higher-salaried industries will begin to move in. The economies of less developed countries cannot accommodate these types of industries for a couple of reasons. First, their labor force and infrastructure are not developed to the level necessary for more complex industries. Secondly, the higher paying jobs these industries provide would throw the country's economy into a state of hyperinflation. This would devastate the country, crippling the majority of the population into a state of spiraling despair.

These reasons are why it is first necessary for a low paying, low skill industry, such as shoe manufacturing, to move in first and put the wheels of progress in motion. This has already happened in countries such as Japan and Korea, which have moved from producing shoes to making some of the best cars and electronics in the world. The fact is that developing countries are clamoring for foreign investment and rely on the shoe 'm not exactly sure what the expression "don't look a gift horse in the mouth" means; I believe it has something to do with the horse's teeth. I do know, however, that the periodic outcries against the "corporate takeover" of the University of Oregon by Nike, Inc. have nothing to do with a horse's teeth but, rather, a large number of horse's asses. The people of Eugene now protest against what they perceive as the coming "Nike U." and are given to vandalizing the company's stores. Now, I'm all for a little good natured rioting every now and again, but I draw the line at throwing a few beer bottles at the police and ripping down a street sign or two. Students at the U of O propose that we should limit the size of donations to the school and boycott Nike. They wail and moan about how Nike runs sweatshops in Asia, employs child laborers in South America, and gouges the common man with outrageous markup on their shoes. These people see a few flashy statistics and a little liberal rhetoric and are soon cringing at the Nike swoosh like a fat man at a rice cake.

These reasons are why it is first necessary for a low paying, low skill industry, such as shoe manufacturing, to move in first and put the wheels of progress in motion. This has already happened in countries such as Japan and Korea, which have moved from producing shoes to making some of the best cars and electronics in the world. The fact is that developing countries are clamoring for foreign investment and rely on the shoe companies to provide much needed capital for their economies. In 1994, athletic footwear manufacturing alone generated over $1.5 billion in exports for Indonesia, compared to their 1988 export figure of a mere $4 million. I have yet to hear any complaints about Nike coming out of the shoe producing countries themselves; rather, they seem to come from a few American do-gooder liberals who feel it is their duty to save the world from capitalist pigs like Phil Knight. I really hate to be bursting so many bubbles of Nike haters around campus, but Nike is not a non-profit humanitarian aid organization. It is a business, and in a capitalist society, the goal of businesses is to make money. And anyone who wants to argue against capitalism as a basis for our society can frankly go to hell. As a profit-oriented organization, it is in Nike's best interests to produce for the lowest cost possible.

This is why they contract out production to Asia, where the people are willing to work for less money. No one is forcing these people to work in the factories, just like no one forces teenagers to work at McDonald's. In both of these cases, the employees are willing to work for the wages offered, so an exchange of services for monetary payment is made. This is the beauty of capitalism.

Some might argue that Nike shoes are so expensive that the company can afford to pay the workers more money. Well, in 1995, the Washington Post did a study on the cost of a pair of shoes. It determined that a pair of $70 "Air Pegasus" shoes represented the average pair of Nike shoes and broke down their costs as follows: production labor - $2.75, materials - $9.00, rent and equipment - $3.00, supplier's operating profit - $1.75, duties - $3.00, shipping - $.50, cost to Nike - $20.00, research and development - $.25, promotion and advertising - $4.00, sales, distribution, and administration - $5.00, Nike's operating profit $6.25, cost to retailer - $35.50, retailer's rent - $9.00, personnel - $9.50, other - $7.00, retailer's operating profit - $9.00, cost to consumer - $70.00. As you can see, Nike only makes a profit of $6.25 on this pair of shoes, while the retailer makes $9.00. I believe we need to start picketing Foot Locker and Champ's Sports for the unfair exploitation of the poor indigenous people of Beaverton, off of whom the retailers are making such a large profit.

Another statistic that is often thrown about by anti-Nike activists is the large sums of money paid to athletes to promote Nike products. Michael Jordan is paid about $20 million per year to endorse Nike's wares. But how many of you buy a pair of shoes because it was stitched by a 19 year old Vietnamese girl? (I might think about it if she could dunk from the free throw line.) The fact is that people are paid in relation to the value they add to the company. Nike would not pay Jordan so much if he was not worth it. He generates a huge amount of revenue for Nike and is compensated for doing so. This concept of everyone getting paid in accordance with the worth they provide to their employer may be a new one for many people, but it seems to work out fairly well.

So, my friends, take heed of this wise sentiment: Phil Knight is our friend. Nike may not be the greatest company in the world, but they are not the monsters that many make them out to be. They are merely another business out there trying to make a buck. The workers who make their shoes are not de facto slaves being exploited by the big, bad corporation but are very poor people living in even poorer countries that are trying to kick start their own industrial revolutions; the well-meaning yet misguided leftists of Eugene are only inhibiting their social progress.

Most importantly, Phil Knight is just another guy who graduated from the U of O and wants to give back a little bit to his alma mater to leave behind a legacy. We are the ones who benefit from his generosity, and we should be grateful.

Josh Grove, a senior majoring in Business Management, is a staff writer for the Oregon Commentator