Question

Respond to the following quote concerning Nike’s relationship with its global network of over 700 independent supplier factories:

The relationship is delicate… NGOs have berated firms such as Nike for failing to ensure that worked are paid a `living wage. ` but that can be hard, even in America…In developing countries, the dilemma may even be greater: “In Vietnam, [Nike’s] workers are paid more than doctors. What’s the social cost if a doctor leaves his practice and goes to work for [Nike]? That’s starting to happen.

Answer 1

If the doctors leave his practice and goes to work for Nike then the social cost of this change will be high. This is because doctors help to prevent diseases and control the diseases and this reduces the mortality rate of an economy. If the doctors start leaving their jobs, then this will increase increase prevalence of diseases in an economy and overall health of the individual of the individual will suffer. Only at the individual level but this will also have a societal impact as health of individuals will also suffer because of infectious disease spreading fast because of lack of control measures. Preventive measures will also not be taken in the absence of doctors. Thus, overall the health of the economy will also suffer as individuals become sick. Thus, social cost is high when the doctors leave his practice and goes to work for Nike.