Question

Klein argues that brand-based companies are not about products but about brands. To make up for the exorbitant amounts of money they spend on marketing their brand, companies usually pay and invest in workers as little as possible to cut costs and increase profits. Why would workers stand for this?

Answer 1

Naomi Klein's criticism highlights that companies often prioritize branding and reducing labor costs for profit maximization.

Step-by-step explanation:

Naomi Klein's branding critique in No Logo suggests that companies prioritize marketing their brand over investing in their product or workforce. Essentially, in order to maximize profits, companies spend heavily on advertising while minimizing labor costs, sometimes leading to suboptimal conditions for workers. Workers may endure these conditions due to a lack of alternatives or the fear of losing their current job which may pay more than the market average, as posited by the efficiency wage theory.

The theory implies that companies may pay slightly above market wages to boost productivity, avoid the costs associated with turnover, and inspire loyalty among employees. Workers, recognizing the comparative advantage of their current employment terms, are compelled to work harder.

This efficiency wage practice is, however, not universal, and some workers may find themselves in situations where their wages are suppressed to improve profit margins.