Marcos and Zac
Overview
A shoe buyers dilemma
Shoes more recently than ever before have started to play a huge role in most peoples lives and with that has come prices that no one before could have every imagined. We wanted to know why is it that these things that are supposed to protect your feet turned into a culture and to what lengths people will go to sell them. Its already widely known that big companies use sweet factories to make most of their shoes for a fraction of the cost they are sold yet people still buy them for the obscene prices. this is an important topic to discuss because of unfair and inhumane ways that the people who make the things that we all care so much about are treated.
We Know there are hundreds of different shoe providers out out there but for the purpose of this we will be focusing on major brands such as: Nike, Adidas, and Vans
Have you ever wondered where your shoes come from, how they are made, or why they cost so much. We have which is why we set out to find the answers About why these objects have such an affect on peoples lives
Research Question:
What we wanted to know is what exactly is the correlation between the cost and labor conditions it takes to make Nike shoes and how much they are sold retail ?
We hope to find why demand is so high for shoes, what are the consequences that come along with the creating and purchasing of the shoes, and what are the benefits and losses of how these shoes are made and could we do it better
Supply And Demand Evidence #1:
Since shoes are in such high demand in today market compared to in the past it has forced shoe makers such as Nike to find alternative ways to keep up with the infinitely growing demand for shoes and how they can do that cheaply. In 1995 Nike's stock was work 2 dollars a share. And then in April of 2018 the stock is work 68.3 dollars a share.
Externalities Evidence #2:
One solution that big company's found to be most effective is using sweat shop labor in developing countries. These people are forced to work long hours in terrible environments and for little pay in the U.S. these sweat shops would be considered "Illegal". but that's not to say they aren't without benefits for one they provide jobs for the people of developing countries that would not otherwise exist "The employees were commonly the poor inhabitants of the area surrounding the factory looking for any sort of income." and two it provides cheap ways for companies to make shoes that are sold for hundreds of dollars. Is this a fair way of doing it? no its not but is it efficient? yes very
Human Capital Evidence #3:
So yes the idea of these sweat shops is efficient they aren't exactly fair for one these workers have gained a very valuable skill at least it would be in the U.S. since the shoes are in such high demand in the U.S. Nike would have to pay a high wage to workers if they were here however workers in a place like Indonesia only get paid $.50 a day because that's the only work that's out there. It just like most things is relative something that's very valuable in the U.S. might not be for the rest of the world so that effects how people are paid.
Economic Conclusion
Nike shoes cost so much because there is an incentive for companies to raise the price because the demand for the shoes are so high, at the same time there is an incentive to have production done in other countries that have lower work standards and pay employees less. Even though this may be unethical, businesses like Nike are after the most profit.