‘It's Gotta Be Da Shoes’: Domestic Manufacturing, International Subcontracting, and the Production of Athletic Footwear

Abstract

An apparent paradox exists in the geography of athletic footwear production. The industry is highly labor intensive; it is also locationally volatile. Although most production now takes place in Southeast Asia, the United States nevertheless still contains significant enclaves of athletic footwear production. Moreover, the cheapest shoes continue to be produced in the United States whereas more complex, expensive models tend to be manufactured in Asia. To understand this geography, we must move beyond the basic consideration of international labor-cost differentials. By means of two case studies, it is shown that domestic production involves very different labor processes from those of production based in other countries and, like many other sectors of the economy, domestic producers gain advantage by carrying smaller inventories through faster lead times. The best explanation, though, centers on the shoes themselves. Athletic shoes produced in the United States tend to have many fewer stitches in them than those manufactured elsewhere, which minimizes the most expensive component of the production process. Furthermore, tariffs on athletic shoes massively discriminate against imported shoes of a particular construction.