Essay about Minimum Wage and Philip H. Knight

Decent Essays

Nike is a huge supplier if athletic shoes for the world these days. Philip H. Knight, the founder of this corporation came up with an idea of an athletic shoe at the track field of the University of Oregon. Now it has become a leader in the global economy. Nike has helped the economy by employing more than 500,000 people, worldwide. The company has contributed in finding a positive policy for minimum wage. Minimum wage laws usually don't help who they're originally set out to. Now with Nikes' minimum age requirements it helps those it was naturally set up for. The minimum age requirement also prevents teenagers from dropping out and taking on full time jobs at Nike. Philip H. Knight knows people respond to incentives, …show more content…

Both parties need to weigh the opportunity costs of their decisions. The University of Oregon is looking at a 50 million dollar opportunity cost if they join the WRC. This is a huge extranality to the students of Oregon. To give up on receiving that kind of donation really hurts the students. If the University of Oregon and some other schools decide to join the WRC the impact could be one of hurting the economy. There will be less need for employees because the donations of athletic wear will decrease significantly. The equilibrium will change resulting in a revenue loss to the corporation and to the employees that will no longer be needed. Nike is trying to deal with this through private solutions. Knight authorized the PricewaterhouseCoopers factory monitoring group to give the results on their visits, because he says they have nothing to hide. Students from the University were even permitted to monitor some of the manufacturing sites. Knight is trying to use the Coase theorem in solving this problem. Nike corporation has already paid significant amounts of Pigovian taxes to improve air quality and temperatures in their footwear factories. Since none of the factories had to shut down the taxes were apparently not that horrible for Nike. Nike at this time knew the situation could not be resolved. Nike has changed there working environments for their employees from past mistakes. Hopefully Nike and the Universities

Get Access