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Reich writes: "Tomorrow President Obama will be giving a speech promoting the Trans-Pacific Partnership. Paradoxically, he's chosen to give it at Nike headquarters in Oregon."

Robert Reich. (photo: Richard Morgenstein)
Robert Reich. (photo: Richard Morgenstein)

Why Nike Is the Problem, Not the Solution

By Robert Reich, Robert Reich's Blog

08 May 15


omorrow President Obama will be giving a speech promoting the Trans-Pacific Partnership. Paradoxically, he’s chosen to give it at Nike headquarters in Oregon.

Nike isn’t the solution to the problem of stagnant wages in America. Nike is the problem.

It’s true that over the past two years Nike has added 2,000 good-paying professional jobs at its Oregon headquarters, fulfilling the requirements of a controversial tax break it wrangled from the state legislature. That’s good for Nike’s new design, research and marketing employees.

But Nike’s U.S. workers make only a tiny percent of Nike’s products.

In fact, Americans made only 1 percent of the products that generated Nike’s $27.8 billion revenue last year. And Nike is moving ever more of its production abroad. Last year, a third of Nike’s remaining 13,922 American production workers were laid off.

Most of Nike’s products are made by 990,000 workers in low-wage countries whose abysmal working conditions have made Nike a symbol of global sweatshop labor.

As wages have risen in China, Nike has switched most of its production to Vietnam where wages are less than 60 cents are hour. Almost 340,000 workers cut and assemble Nike products there.

In other words, Nike is a global corporation with no particular loyalty or connection to the United States. Its loyalty is to its global shareholders.

I’m not faulting Nike. Nike is only playing by the rules.

I’m faulting the rules.

Trade agreements like the Trans Pacific Partnership protect corporate investors but lead to even more off-shoring of American jobs.

They make it safer for firms to relocate abroad – the Cato Institute describes such investor protections as “lowering the risk premium” on offshoring – thereby reducing corporate incentives to keep jobs in America and upgrade the skills of Americans.

If the Trans Pacific Partnership goes into effect American wages will be dragged down by further losses of manufacturing jobs.

All workers with similar skill levels face downward wage pressure when Americans displaced from better-paying manufacturing jobs join the glut of workers competing for non-offshorable jobs.

Jobs being lost to imports pay Americans higher wages than the jobs left behind. Government data show wages in import-competing industries (e.g. manufacturing jobs) beat those in exporting industries overall.

We can’t educate our way out of this. American workers with a four-year college degree are also highly vulnerable to job offshoring, according to a study by Princeton economist Alan Blinder.

He found that the one out of every four American jobs in finance, information technology and professional services could be offshored in the foreseeable future.

Bottom line: we need new rules for the global economy that allow Americans to win.

Instead, the Trans Pacific Partnership – which includes 12 nations, including Vietnam, but would be open for every nation to join – would lock us into an expanded version of the very policies that have failed most American for the past twenty years.

The White House says the TPP includes strong labor and environmental standards. But these are the same standards included in George W. Bush’s last agreements.

No doubt Nike is supporting the TPP. The corporations would get a tax cut on its Vietnamese and Malaysian-made goods. But even with the tariffs in place, Nike’s current expense for those $100-plus shoes is less than $10 per pair. So don’t expect that tax cut to result in cheaper prices for American consumers.

Needless to say, the TPP wouldn’t require Nike to pay its Vietnamese workers more. Nikes’ workers are not paid enough to buy the shoes they make much less buy U.S. exported goods.

Nike may be the perfect example of life under TPP, but that is not a future many Americans would choose. your social media marketing partner


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+37 # dheiser41 2015-05-08 13:08
Hey Marc Ash...

What would it cost to email this to every member of our Congress? Do you think they would even read it. Maybe not but a few might. What do you think?

Dan Heiserman,
San Diego, California
+15 # Merlin 2015-05-08 13:26
dheiser41 2015-05-08 13:08
Hey Marc Ash...
“What would it cost to email this to every member of our Congress? Do you think they would even read it. Maybe not but a few might. What do you think?”

I would never presume to answer for Marc Ash or anyone but myself. And you did not ask me, so instead I will let Chris Hedges give you his answer.
+31 # cymricmorty 2015-05-08 14:00
Thanks. Stirring words from Chris Hedges. Whatever the outcome of 2016, it'll be up to the 99% of the world to get rid of the 1% of the world, as they pull all strings, including those of our supreme leaders.

I'll add that after all we've lost due to the other trade agreements, Obama's relentless hard sell of the TPP is disgusting.

+13 # Merlin 2015-05-08 17:19
cymricmorty 2015-05-08 14:00

I’m glad you found it a good read! I certainly did. The raw truth is often a tough meal to gag down. Much easier to avoid looking at it. Chris tells it like it is here.

At the risk of boringly repeating my rant, I believe these trade agreements are the major job that Obama was given to accomplish in his Presidency. His most important job! I believe he is under strong pressure from the oligarchs to get this done. If they get the TPP, TTIP and the ISDS they want, it will be a major step closer to the One World Order the oligarchs have been working toward for more than 100 years. This is no conspiracy theory. All national sovereignty will become subservient to the corporate demands pressed through the ISDS. IOW, no more nations.

So I agree with you, Obama pushing these treaties is disgusting, to say the least.
+12 # economagic 2015-05-08 18:11
Hear, hear. Some people here seem to think that the Democratic party is the solution, though others demur. Not too many seem to realize that Obama was hand picked for the job, or by whom.

(Hint: The guilty party had already robbed, er, run a bank into the ground several years before it became a competitive sport, though it had been played a decade earlier in the minor leagues.)
+21 # Harvard72 2015-05-08 14:21
The Keystone Pipeline was an absolute marker, and although Obama should have unequivocaly stated opposition earlier, his veto put him on the right side of the marker. The Fast Track and the TPP itself is another marker--Obama has failed this one totally. When you are on the side of McConell and Boehner, you know you are on the wrong side. Many Democrats have shown that they fail, and will not get any support from "Progressives" again. I believe this is a key moment for Hillary--she is trying to sound like she knows what current reality is for the American people, but unless she unambiguously rejects Fast Track and the TPP, it will be clear that she is just flapping her gums. If she joins with Bernie Sanders and Elizabeth Warren to oppose the President and the Republicans on TPP, then there will be some hope that she could actually be worth supporting.
+21 # reiverpacific 2015-05-08 15:06
It's a well known, recorded and oft-stated fact that in wars, the spoils, history and subsequent rules are made by the winners.
These trade wars -for that's what they are- are no different, for this country is now a fully-fledged Oligarchy.
I'll never forget when Billy-Bob Clinton was trying with all his considerable salesman's skill, to enthusiasticall y shove NAFTA down our throats, he trotted out every living president onto a staged event for TV, from even Jimmy Carter on up to himself (Reagan was either dead or pretty close).
You have to wonder why such anti-populist legislation, drawn up by a quietly formed board or panel of multi-national CEO's, is enthusiasticall y embraced by ALL presidents without exception -and why they don't want anybody to see it as it whizzes on the fastest track they can get it on, right before the noses of all who'll never see it until it's a faite accompli.
+27 # DPM 2015-05-08 15:09
Don't "hope" Hillary Clinton will come around. She will say what is necessary to get elected, then do what she is "paid" to do.
Go with Bernie. He actually means what he say's. You can tell just by the way the media treats him...which is not at all. We, the actual "little people" of this country, need to support him and spread the word.
+6 # Henry 2015-05-08 16:19
+4 # REDPILLED 2015-05-08 19:41
Chris Hedges: Bernie Sanders is Giving Legitimacy to the Democratic Party | Dandelion Salad
+21 # MHAS 2015-05-08 15:12
It is hardly "paradoxical" that Obama's speech promoting the TPP is to take place at Nike headquarters. It is utterly appropriate, as Reich goes on to demontrate. I'm sure the Obama administration is fully aware of the symbolism. I doubt that Obama would have the gumption to propose such a speech take place at the headquarters of the AFL-CIO or that of a major environmental group. TPP---- a race-to-the -bottom trade deal from a neoliberal Democrat.
+22 # turtleislander 2015-05-08 15:47
Sickening and demoralizing is what embrace of the TPP is. Fast tracking is borderline criminal. The U.S. Can't build a high speed rail line but they can build a fast track to hell in a New York minute.
+12 # harleysch 2015-05-08 15:53
RSN should have changed the headline of this piece to "Why OBAMA Is the Problem, Not the Solution."
+10 # Buddha 2015-05-08 15:58
We get the policies that we deserve. Americans have allowed themselves to be put asleep and as a result, as reiver correctly stated, we now live in an Oligarchy where both political parties are completely owned. Hence why the "final two" candidates will both be bought with billions of dollars of donor-class money, and will do the bidding of those donors. Even John Roberts admitted as such in his last ruling on the case about whether Judges should be allowed to solicit campaign donations...he said no because there is an expectation of fairness from our judiciary, whereas our legislators are expected to be "responsive to their supporters" (by which, in context, he meant "Oligarchic donors"). We're done as a country. Occupy was our last chance, and not enough got up off their couches to join us on the front lines against this corruption, so we were too small and were easily crushed by the Oligarchs' stormtroopers.
+5 # Robbee 2015-05-08 16:53
re: "Last year, a third of Nike’s remaining 13,922 American production workers were laid off."

at today's press conference nike said, if we do tpp, it may hire (back) 10,000 American production workers - whoop te doo!

our (he got tired and stopped fighting for us and now fights against us) prez says today - if we don't make the rules china makes the rules

only problem - we don't make the rules, global corporations make the rules

how it works - a panel of global corporations decides what profits our labor and environmental laws will, over the course of several years or decades of production, cost global corporations; present the bill; we the people, thru our government, pay the bill - our courts are not permitted to review anything - our participation in this blood-sucking lechery is solely to provide the blood

obama rarely lies, but when he does, it's a doozy

speaking of hill, which those here have a hard time not doing, see above - she may have just won (or lost) the 2016 election by challenging zomblican candidates to match her support for full amnesty for immigrants - hats off, hill! hurt the bastards!
+10 # Robbee 2015-05-08 17:14
another thing, hill did not have to join bernie and liz in opposing tpp

as front-runner and somewhere presumed dem candidate for next prez, her opposition to obama's stupid tpp is a major embarassment

we can only hope our so-called dem prez comes to his senses - his leadership of the dem party is being challenged - bury tpp! bury fast-track! power to the people
+1 # cordleycoit 2015-05-10 11:33
One might even think of abolishing the monetary system, why go for half measures.
+1 # James38 2015-05-11 23:41
Elizabeth Warren has answered Obama. Even without the discussion of details that Elizabeth Warren has provided, the simple fact that the text of the TPP is classified - held secret from the US public - is a glaring abuse of government power.

President Obama, how dare you prevent the citizens of the country from seeing the text of a TRADE AGREEMENT??? An agreement that will affect every citizen of the country?

This is not some military secret that might cause damage if known. This is a TRADE agreement that should by its very nature be open to public scrutiny and discussion.

Unless Obama releases the text immediately in answer to Warren's position, I recommend that every citizen demand of all Representatives and Senators that they refuse to grant fast-track.

More than that, until the text of the proposed agreement is made public, I recommend that we all totally oppose the passage of the TPP.

This smacks of nothing less than collusion and favoritism for the big banks and big corporations, and constitutes a direct attack on the effectiveness and the existence of Labor Unions. It is a direct attack on the American Worker, and a threat to our jobs.

This collusion can have no other effect than weakening the US economy and eliminating good paying jobs. It also puts the full power of the US Government behind maintaining the wage disparity between developed and developing countries to the detriment of workers in other countries - not just the US.

+1 # James38 2015-05-11 23:42

The TPP looks more and more like NOTHING BUT a way to grant indefinite continuance of sweat shop labor, which is (among other companies), JUST WHAT NIKE WANTS. A Nike shoe that costs Nike $10.00 to make is sold by Nike for $100.00 or more. This is where their absurd profits come from. Those shoes could be manufactured in the USA, giving jobs to US citizens. The only difference would be that Nike would make "ONLY" $20 or $30 profit per pair instead of $90 or more.

President Obama, if the TPP is anything but an attempt to keep world workers in sweat shops in order to allow big corporations to make ridiculous profits, PUBLISH THE TEXT.

Let US decide if there is any rational reason at all for this agreement. Let us see the whole TPP agreement NOW.

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