The whole idea of substituting domestic for foreign labor in order to
>cut down costs stemmed from a trend that started in 1970. A lot of
>companies started relocating their resources to developing countries,
>and so did Nike. They realized that labor force in developing
>countries was much cheaper than in the United States. This soon
>resulted in an emergence of a multitude of factories, most of which
>were located in China. This allowed Nike to increase their profits
>substantially, and not only that. A big part of Nike's consumers
>were in China as well, so they killed two birds with one stone. However,
>there was lots of drawbacks, too. Moving factories to China resulted
>in an occurrence of externalities such as a rise in unemployment in
>the U.S.; the quality of Nike's product also suffered, because the
>workers were not trained and the job didn't require pushing buttons
>only. The advantages; however, outweighed the disadvantages and today
>Nike still has factories in China and other developing countries.