Nike Footwear Industry

US footwear industry has a steady growth but manufacturing employment experienced a 40% decrease over the decade. Meantime, office and admin support jobs only declined by 25%, and other positions almost remain the same. The increased wages of labor at developed countries and high competition from low-cost countries like China and Vietnam are the main reason for the dramatic manufacturing employment decline.

Nike supports the removal of tariffs on footwear because they think that US footwear industry will benefit, create high-value jobs, and increase consumer surplus by lowering costs and prices. Today, none of Nike’s 38,000 workers are manufacturing workers. Without TPP, Nike must pay more to import footwear into the United States. Import

It has much larger revenue than New Balance. They outsource all the products to the low labor cost countries, then import back to the American market to sell consumers. TPP and removing tariffs will create high profit margins for Nike. Because, most of the extra costs comes from transportation cost, import tariff and another value-added tax. Nike also provides jobs in America, but basically no manufacturing jobs. All workers are involved in designing, engineering, promoting and selling the products in Nike stores.

New Balance

The fourth largest athletic footwear and apparel company in the world. The company focused on footwear innovation, customized products and “made in America” business strategy. Although New Balance relies heavily on foreign contractors, but it does not outsource all their footwear production to foreign countries. They have a lot of factories in small cities in U.S. They offer locals jobs to from design to manufacturing of footwear products. Removing the import tariffs will significantly affect the New Balance’s competitive advantage in the US market.

What should Froman

Therefore, job skills and education level should be changed. US workers should focus on more design, engineering, innovation, customized products and supply chain management. Government officials and trade representatives can organize these kinds of trainings to manufacturing workers, subsidies to factories and local economy that heavily depends on manufacturing, and enough confidence that certain industries will benefit with the country.

I fully support the following quote made by As Senator Bernie Sanders;

“I do not believe that American workers should have to compete against people in Vietnam who have a minimum wage of 56 cents an hour”.

I think, Michael Froman should train the leading manufacturing companies to be more competitive in the world. Companies who highly concerned about the elimination of import tariffs should invest more on engineering, design and global expansion. They can still create more jobs on these areas and need to change their mind set.

Finally, sport footwear materials and components produced in US factories not obtained in US market. Either, because they are not available, or because economic or quality considerations dictate foreign sourcing. The Federal Trade Commission has attempted to determine what it means to say a product is “made in” the U.S. I believe that most consumers think “Made in U.S.A.” means that real manufacturing jobs were provided to