Facts about Nike

from Global Exchange

Where does Nike produce its shoes?

During the 1970's, most Nike shoes were made in South Korea and Taiwan. When workers there gained new freedom to organize and wages began to rise, Nike looked for "greener pastures." It found them in Indonesia, China, and most recently Vietnam--countries with no protective labor laws, endless supplies of cheap labor, and authoritarian leaders who outlaw independent labor unions. By 1992, Nike had eliminated nearly all of their U.S. work force in favor of low-wage Asian producers.

Why pick on Nike, if all shoe companies are the same?

The Asian-American Free Labor Institute in Indonesia says Nike factory workers file more complaints about wage violations than any other shoe company. Nike has been in Vietnam for less than two years and already one factory official has been convicted of physically abusing workers, another fled the country during a police investigation of sexual abuse charges, and a third is under indictment for abusing workers, as reported in the New York Times. Nike, the biggest shoe company in the world, spends over $600 million a year on marketing ploys that "empower" women and inner-city youth to buy shoes that were made with sweatshop labor. Nike has a responsibility to abide by humane labor practices as defined by their Code of Conduct which says "in the area of human rights... in the communities in which we do business - we seek to do not only what is required, but what is expected of a leader." A leader would not lower human rights standards to maximize profits. Some U.S. companies like New Balance make most of their shoes in the U.S. paying workers over 30 times what Nike workers get in Vietnam. And New Balance still makes a profit.

Aren't the workers happy to have the factory jobs?

Workers risk retaliation and further repression by staging strikes to protest Nike's unfair labor practices. In April 1997, 10,000 Indonesian workers went on strike over wage violation. In the same month, 1,300 workers in Vietnam went on strike demanding a one cent per hour raise and last year 3,000 workers in China went on strike to protest not only low wages, but hazardous working conditions. Perhaps it's true that a bad job is better than no job at all, but a good job is certainly better than a bad one. Nike, a company with over 6 billion in revenue in 1996, could afford to create good jobs that pay livable wages.

Isn't the minimum wage enough to live on in those countries?

In Vietnam, the cost of a meal is 60-90 cents, so the daily wage of $1,60 is not enough for three meals in the urban city of Ho Chi Minh (where Nike factories are located), let alone enough for transportation or shelter. The Indonesian government admits minimum wage is only %90 of subsistence needs for one person. U.S. companies like Coca-Cola and Goodyear recognize minimum wage is not enough. They are in Indonesia paying above minimum wage and have remained competitive in the global market. In Vietnam, Reebok factories pay $65 per month, whereas Nike pays poverty level wages of $45 per month.

Can Nike afford to pay workers a living wage?

Just two percent of Nike's 630 million dollar operating budget could raise the salary of all 25,000 Vietnamese workers from a meager $1.60 a day to a livable wage of $3 a day.

Andrew Young is the former U.S. Ambassador to the United Nations. He was allowed entry into Nike factories and came away with a glowing 75 page report that said Nike is great. Doesn't this prove Nike has cleaned up its factories?

Andrew Young is not an expert on labor issues in Southeast Asia. He spent 15 days in three countries (including travel time), took many pictures (which constitutes every other page of the report) and used Nike translators on a pre-arranged Nike tour. It is highly unlikely that Young gained the trust of factory workers in a few short hours. He was probably viewed as part of management. But most importantly, he failed to look into allegations of forced or excessive overtime, sub minimum wages or the usage of toxic chemicals such as Benzene, a glue that has been linked to leukemia.

A recent report on Nike's labor practices in China was released by two Hong Kong based human rights groups whom Nike has attempted to discredit. Nike says that those "who have taken the time to learn and understand the facts," such as Andrew Young, recognize the progress Nike has made in improving working conditions. Is the Nike in China report credible?

Both the Asia Monitor Resource Center and the Hong Kong Christian Industrial Committee are non-governmental organizations that have been advocating labor rights in Hong Kong and China for over twenty years each. They have issued reports on working conditions in the shoe, garment, toy and electronics industries. They help workers exert their legal rights, provide education and training materials and try to raise awareness about the plight of these women factory workers. Both groups seek to identify unfair working conditions or dangerous health and safety conditions - and Nike happens to fall in both of these categories.

What about the allegations by the Hong Kong groups that Nike is employing children as young as 13 years old?

Children were found at the Wellco factory in China working in the sewing, handwork and cutting departments. Nike does not deny that Wellco has employed underage workers. They state, "if anyone underage slipped through this (hiring) process," it is not through a lack of genuine concern. Since when is ignorance a defense to violating the child labor law in China? 'We tried' is not an acceptable answer. Nike closed four Indonesian plants and said the closure was due to a failure of the subcontractors to uphold Nike's Code of Conduct.

Doesn't this mean Nike is getting better?

First of all, Nike would not disclose the names of the four factories that closed, so it was impossible to verify their story. If Nike has nothing to hide and is really doing the right thing, why don't they open their factories to independent human rights monitors that live in the region. Then the local monitors could verify the story. Sources in Indonesia said the factories were closed for budgetary reasons and not for reasons of misconduct. Until Nike hires an impartial monitoring group, we can only assume this is another slick PR tactic to counter evidence of Nike's abusive labor practices.

Don't the women in those developing countries need jobs? If Nike has given them employment opportunities, why criticize them. No one is forcing those women to work for Nike.

When unemployment is high, workers become desperate for jobs. Nike has indeed brought many jobs to Southeast Asia. It is indisputable that the workers need jobs. They don't need to be physically or verbally abused by their supervisor and they don't need to work forced or excessive overtime for sub minimum wages. Job creation and worker exploitation should not go hand in hand.

Nike recently commissioned Dartmouth Business School students to study wages earned at Nike factories in Vietnam and Indonesia. The students spent a couple weeks in both countries gathering data. The preliminary findings were released and the report claims Nike is paying almost double minimum wage in those countries. Doesn't this study prove Nike is paying superior wages?

Of course a factory worker earns double minimum wage, if they work from 100 - 200 overtime hours per month during peak season. The Nike commissioned study, as expected, includes overtime wages. The bigger question is: what does Nike pay workers for an eight hour work day? The answer, often times, is either minimum or below minimum wage. The Indonesian government has admitted minimum wage covers only 90% of the subsistence needs for one person. Many of the young factory women work to support their families. If they are not making enough for themselves - imagine trying to support a family. And this is supposed to be a superior wage??

In April of 1997, 10,000 Indonesian and 1,300 Vietnamese Nike factory workers went on strike over wages. In March 1997, the assembly production department at a Nike factory (Wellco) in China went on strike because the factory did not pay them their wages. All workers who went on strike were fired. I find thousands of striking workers a more credible testament to Nike's inhumane labor practices than a study done by students who don't speak the local language and relied on Nike translators to interpret. Amos Tuck Business school has been courted by other big corporations like Disney and Hewlett Packard, for similar studies.

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