NIKETOWN SHANTYTOWNS?

...By transferring work to parts of the world where production costs are a fraction of those at home, America’s corporate chieftains can lay off expensive American workers and reward themselves with large bonuses as their companies profit...

...France, by the way, fought every liberalizing feature of the last GATT agreement, places quotas on the importation of American films and music, and has managed its own economy into a 12.5 percent unemployment rate— and rising...

...The first is a diverse and as yet ineffective group of consumers that feels it is immoral for rich American companies to employ foreign workers, more often than not young women, at low pay for long hours in hot factories...

...For, as the Clinton administration well knows, international trade is basically a process by which countries with a comparative advantage in some aspect of the production process sell things to countries with an advantage in some other aspect...

...And it transfers income from consumers, who are too many to notice and too unorganized to complain, to a few union workers by imposing higher prices on the former to support higher wages for the latter...

...These overseas workers are employed by contractors and subcontractors in Indonesia and elsewhere...

...In a studio ten blocks uptown, Kathie Lee Gifford holds forth on live television every morning...

...First, of course, we have the trade unions, understandably eager to reduce the competition their members face from their counterparts in developing countries...

...Their second ally has more clout...

...Jordan has signed a one-year contract for $25 million, a sum likely to be doubled by the fees he will receive for endorsing Nike sneakers and other products...

...Air conditioning and other amenities taken for granted here are nonexistent...

...An executive of one small company that manufactures plastic coat hangers in China told me that the wages he pays, which now average $25 per month, have made his workers the richest people in their villages...

...Meanwhile, the workers who make the sneakers that bear his imprimatur earn only a few dollars a day...

...Despite his highly informative sign, none of those lined up to charge the counters at the opening bell decided that solidarity with overseas workers was more important than a new pair of Air Jordans...

...Overseas workers struggling to emerge from poverty will also pay a steep price...

...Just as Cesar Chavez once enlisted consumers in a boycott of grapes on behalf of farm workers, so today’s unions are trying to enlist consumers in their battle to stem the tide of foreign-made goods...

...More likely, they are working at still lower wages, under still worse conditions, perhaps in occupations with more damaging long-run consequences for their health and living standards...

...For one thing, those countries do not exactly roll out the welcome mat for union organizers, both because their regimes are hostile to the development of non-governmental power centers and because they recognize that the road to economic development is paved with foreign investment...

...So far, the administration has pressed its case at the WTO with little fanfare...

...But that seems to be the case in Central America: Business Week reports that Honduran workers who sew Levi’s Dockers and Nike shorts average about $5.40 per day, twice the minimum wage...

...THE ONSLAUGHT AGAINST THE USE OF OVERSEAS WORKERS HAS COME AT A PARTICULARLY INAUSPICIOUS TIME FOR THE BUSINESS COMMUNITY...

...For, beholden to the unions for the tens of millions of dollars they will have poured into his campaign coffers, the president will have to deliver training programs, time off to cope with family problems, time off in lieu of overtime, and other items on labor’s wish list...

...And her subsequent, tearfully contrite appearance before a congressional committee while husband Frank Gifford distributed cash to the exploited workers in New York City...

...So says a new coalition that wants to force American firms to change the way they do business overseas...

...The overseas manufacturers are tapping into a labor market in which a surplus of workers gives them superior bargaining power...

...But they can’t...

...But he will have little or no money to spend, and so he will have to impose the costs of these programs on businesses...

...So far, they have found two allies...

...Remember her embarrassment at discovering that a line of clothing bearing her name was being sewn by underpaid workers here and in Honduras...

...The contractors are paid by American companies to manufacture everything from T-shirts for The Gap to sneakers for Nike...

...overtime work is mandatory, and holidays are few...

...The occasion: the grand opening of yet another NikeTown...

...apparel industry at sweatshop levels, trade-union leaders now want to persuade American consumers not to buy products made under supposedly substandard conditions...

...But if Bill Clinton wins a second term, he will have good reason to pursue this subtly protectionist line with renewed vigor...

...Whether all those who work directly or indirectly for American firms do as well we do not know with certainty...

...But those gains appear to be coming to an end...

...The triumph of the NikeTown stores, the discomfort of Kathie Lee Gifford, and the $12,500 a minute Michael Jordan earns are directly related...

...And executives will have no reservoir of goodwill on which to draw in their defense of the way they do business overseas...

...And the beat goes on: A $100 million NikeTown is scheduled to open on Manhattan’s East 57th Street within the next few months...

...Ross Perot is on the loose again, with federal funds that can be used to publicize the “big sucking sound” he hears in his head...

...He also points to an independent audit showing that 60 percent of the line workers in one Indonesian factory making Nike shoes save more than 25 percent of their monthly pay...

...They are dealing with a work force eager for jobs and capable of living on wages far lower than those paid to American workers...

...Jordan’s critics like to point out that the Chicago Bulls’ star earns more per minute of play than a Nike worker earns in a decade...

...So self-styled protectors of the Honduran and Indonesian poor, egged on by the trade unions, will have fertile ground in which to sow their criticism of the callousness of corporate America...

...Then to Los Angeles, and a stroll down Beverly Hills’s posh Wilshire Boulevard...

...Nor does the fact that the allegedly exploited workers are often better off than their countrymen who remain in primitive agricultural or handicraft industries...

...The protectionist nature of this gambit is shown by the nature of its primary supporter, France, whose highcost welfare state is threatened by competition from the developing countries...

...Irwin M. Stelzer is director of regulatory policy studies at the American Enterprise Institute...

...Not only is the pay low by the standards of the industrialized world, but the working conditions are, to American eyes, appalling...

...Watch for the row over executive compensation to flare up again when critics of Bob Dole’s tax-cut plan point out that it is likely to favor high earners...

...Enter the World Trade Organization and the administration’s plea for “harmonization...

...When asked what she thought those nowunemployed Salvadoran youngsters were doing, she responded that she assumed they were back in school...

...The facts that now-prosperous Japan started as a low-wage producer, and that economic development cannot be achieved overnight, don’t seem to register...

...This neat bit of policy wonkery doesn’t sound protectionist— nothing as crude as tariff walls or import quotas...

...True, the huge capital gains average shareholders have been earning have disposed them to be less critical of the performance of big corporations than would otherwise be the case, on the general theory that it is impolite to bite the hand that is enriching you...

...They involve the manufacture of goods for sale to American consumers by overseas workers who are paid far less than their American counterparts...

...The idea is simple: Require goods being sold on world markets to be manufactured under comparable conditions...

...Unable to organize the overseas work force they think has kept real wages in the U.S...

...Led by labor secretary Robert Reich, the American government is putting pressure on the World Trade Organization to “harmonize” global labor standards...

...And Nike vice president David Taylor says that his company’s subcontractors pay wages higher than the prescribed minima, plus bonuses for attendance, and provide free meals and medical care...

...For another, workers in those countries are not eager to antagonize employers who generally pay them far more than they can earn elsewhere, twice the minimum wage in Nike’s case...

...But that will make it even more difficult for domestic manufacturers to compete with overseas producers— unless those producers, too, are required to bear the costs of similar benefits...

...Just as union organizers of old found that they had to follow the textile industry when it began its move from highly unionized and high-cost New England to the South if they were to protect their hard-won gains in the North, so today’s union leaders would like to follow American manufacturers to Indonesia, Central America, and other places in which goods are being turned out for the American market...

...American consumers will not be the only ones to suffer...

...But if wages and working conditions in every country were the same, if environmental regulations were identical, and if tax rates around the world were “harmonized,” there would be very little international trade...

...One such protester ruefully describes his effort to stem the tide of customers waiting impatiently to flood a Nike store about to open in Seattle...

...Let’s move from Kathie Lee Gifford to Michael Jordan...

...One campaigneragainstexploitation boasted to me of having forced a retail chain to stop using “young teenage girls” to manufacture clothing for distribution in its U.S...

...A mob scene, with four policemen organizing the eager customers into lines that stretch around the block...

...The onslaught against the use of overseas workers has come at a particularly inauspicious time for the business community, which isn’t in a very good position to fight back these days...

...This, despite the fact that their businesses are providing work for virtually all who want it, at rising real-compensation levels, and without raising the prices consumers must pay for most of the goods they buy...

...And the newly popular notion that corporations should behave “responsibly,” on behalf of all their “stakeholders,” rather than merely maximize profits, can easily be expanded to include an obligation to go beyond the requirements of host-country laws in remunerating workers...