11/15/13 “To buy or not to buy” What is a product you wish you could have? Approximately how much does this product cost? Would you pay 25% more for this product if it was guaranteed to be made in a factory in the U.S. with good working conditions and fair wages ? Why or why not?

11/15/13 Econ. Agenda Sweatshop vocabulary & profit maximization (class notes) “Sweating for a T-shirt” (watch documentary) HW: Sweating for a T-shirt follow-up questions Sweatshops Quest on Tuesday

Class Notes – Sweatshops 11/15/13 Class Notes – Sweatshops Sweatshop: a place of work with dangerous conditions and limited worker rights and benefits Most clothing companies earn a profit by using cheap labor in sweatshops to produce expensive clothes Sweatshops that produce clothing in Latin America are referred to as “maquiladoras” or “maquilas”

Quota: a required number to be filled Example: Marilena must meet her quota of producing 200 shirts today or she does not get paid.

Union: organization of workers formed to protect and further their rights and interests Unions can make demands that speak for all employees.

Profit Maximization Profit: how much you earn after taking into account the costs of production Maximization: to earn the most

Example: We pay upwards of $200 for Jordan’s Profit Maximization Example: We pay upwards of $200 for Jordan’s Nike’s Costs: String: $0.13 Leather: $3.00 Plastic: $0.18 Cotton: $1.45 Paint: $0.06 Worker: $3.00 Box: $0.45 Shipping: $15.00 $23.27 What’s Nike’s Profit? $200.00 - 23.27 $176.73 per shoe

Why do sweatshops exist? Low/Middle development countries: need money & jobs for their people Consumers: want cheap products Free Trade Zones: no laws to protect workers countries make agreements to have FTZ’s where laws & tax restrictions are limited in order to maximize profit Corporations: want cheap labor and no laws Poor people: need jobs

To Do: Watch “Sweating for a T-shirt” documentary Questions due for HW

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