Sewing for Millionaires: Rawlings’ operations in Costa Rica

  1. In your opinion, is Rawlings exploiting its Costa Rican employees? Explain your answer.

In my opinion, I don’t think Rawlings’ operations in Costa Rica are exploitative.  The very nature of capitalist enterprise is such that cost efficiency is a major driver of business.  To criticize Rawlings for doing what it is legally mandated to do (namely, to seek profits for is shareholders) is quite unfair.  Moreover, critics are not appreciating how Rawlings has created jobs in the Costa Rican economy. Companies such as Rawlings have helped consolidate Costa Rican economy.  It is in recognition of this fact that the Costa Rican government has offered special economic zone status to Rawlings and other MNC manufacturing units.

Even when one looks at wages and employee benefits, Rawlings has done nothing illegal.  The company has adhered to minimum wage standards of Costa Rica.  Further it complies by paid-leave and medical insurance requirements for its employees. What is more, even the employees who are working for Rawlings are by and large happy with their work conditions.  For them it is the stability and security offered by American companies like Rawlings against the toil and insecurity associated with farming work. They would much rather prefer the former to the latter.

  1. Is it fair to compare the salary of Major League Baseball players to that of employees who sew baseballs?

It is absurd to compare the salaries of MLB players and that of factory workers in Costa Rica. Each class of worker is paid according to their skills, market potential, brand equity, etc.  Upon considering all these factors one can rationalize why MLB players are paid huge sums of money.  It is based on their star value and unique sporting skills that the game of baseball thrives.  Hence it makes commercial sense to invest huge amounts on players. In a similar vein, the workers sewing balls in Costa Rica are happy for the employment opportunity given them.  They are not grudging the fact that the users of their products are many times wealthier than they are. Their salaries can only be compared to the per-capita income of their country.  Since their salaries are above the average in Costa Rica, the workers should consider themselves lucky. Moreover, there is no undue discrimination against Costa Ricans from becoming baseball players.  Those with skill, aptitude and industry can train themselves to become baseball players.  In fact, the history of MLB is replete with examples of players from Central American countries who were able to adapt and succeed in the quintessential American aport.  

  1. If you were the CEO of Rawlings Sporting Goods’ parent company (K2, Inc.) what action would you take, if any, given the present situation?

If I were the CEO of Rawlings or its parent company K2 Inc, I would not feel too guilty.  I am proud of the fact that our company is able to provide attractive job opportunities for thousands of Costa Ricans.  I also take pride from the fact that all our activities in that country are consistent with its laws. I also feel that globalization is a force for the good and it should be embraced by all stakeholders. Where I would focus on is in projecting the activities of our company in a positive light.  I believe there are many misconceptions about outsourcing which I would like to disabuse the public of. To this extent I would invest in Public Relations efforts of K2 and Rawlings, instead of getting bogged down by the shrill criticisms of our company’s style of operations. The public relations campaigns will bring awareness about the good deeds of our company in the third world.