Nike FAQs

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 where protective labor laws are poorly enforced and cheap labor is abundant. Also in China and Vietnam, the law prohibits workers from forming independent trade unions. This was also true in Indonesia until 1998, when dictator General Suharto was overthrown. These three countries continue to be the major places where Nike shoes are made.

Does Nike run its own factories?

No, Nike does not own any of the factories where its shoes are produced; it contracts the work to various factory owners. Nike say it is in the business of "marketing" shoes, not making them. However, Nike dictates the terms to the contractor: the design, the materials, the price it will pay. While companies like Nike used to try to avoid responsibility for factory conditions by saying they were "just the buyer," the anti-sweatshop movement has made this excuse unacceptable and forced the retailers—who are, after all, the ones who make the greatest profit—take responsibility for the workers who make their products.

Why pick on Nike, if other shoe companies are just as bad?

First of all, we heard many, many complaints from Nike workers and local labor groups. The AFL-CIO office in Indonesia, for example, said that Nike factory workers filed more complaints about wage violations than any other shoe company. In the first two years that Nike was in Vietnam, one factory official was convicted of physically abusing workers, another fled the country during a police investigation of sexual abuse charges and a third was under indictment for abusing workers, as reported in The New York Times.

Secondly, it's important to pick a company that can afford the cost of improvements. Nike is so profitable and sells its shoes for such high prices that it can well afford to double the workers' wages without increasing the retail price.

Thirdly, Nike is the biggest shoe company in the world and puts itself forth as an industry leader. Their Code of Conduct 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." By targeting the industry leader, we hoped to make changes throughout the whole industry. This strategy has proven effective. Reebok, for example, has been making improvements in its overseas factories even though it has not been the target of a major campaign. Adidas, fearful of being tarred with the Nike brush, is starting to make changes as well.

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

Nike has indeed brought many jobs to Southeast Asia, and workers certainly want jobs. But they want their dignity, too. They don't want to be physically or verbally abused by their supervisors or to work excessive overtime for extremely low wages. Job creation and worker exploitation should not go hand in hand. It is not enough to simply create jobs; Nike should be creating opportunities and prosperity, paying wages that allow its workers to pull themselves out of poverty.

While company officials say that many workers line up to get these jobs whenever there are openings, they fail to mention the numerous strikes that workers organize to protest unfair labor practices. In April 1997, 10,000 Indonesian workers went on strike over wage violations. In the same month, 1,300 workers in Vietnam went on strike demanding a one-cent-per-hour raise and in 1998, 3,000 workers in China went on strike to protest not only low wages, but hazardous working conditions. And remember, in these countries, workers who protest put themselves at great personal risk. They can end up fired and blacklisted from further jobs, or worse yet, be interrogated and jailed.

It can be argued that a bad job is better than no job at all, but a good job is certainly better than a bad one. Nike can well afford to provide healthy working conditions and pay a living wage.

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

When the Nike campaign began in 1996, Nike was not even paying their Indonesian workers the minimum wage. In fact, all the shoe companies doing business in Indonesia would petition the government year after year for an exception from paying the minimum wage on the grounds that it would be a "hardship" for the factories to pay it. And this was a wage that, according to the Indonesian government itself, covered only 70% of the basic needs of one person!

Another problem was that several factories in Indonesia and Vietnam would pay new workers an apprentice wage that was below minimum wage, justifying this on the grounds that the women needed several months to learn the job. But most of the time, the women would get a few hours training and be put right on the assembly line. The apprentice wage was merely a pretext for cheating workers.

By 1997, Nike was shamed into telling its Indonesian contractors to stop asking for exemptions to the minimum wage and to stop paying apprentice wages. But the company still does not require its contractors to pay workers a living wage. In April 1999 when the Indonesian government announced that it was increasing the minimum wage to 231,000 rupiah/month ($26US), Nike for the first time announced that it would raise wages for its Indonesian factory workers higher than the legally required minimum,. Their new wage was a minimum cash wage of 265,000 ($30US) and a bonus package that adds up to 332,000 ($37.50US).

While this is certainly a step forward, the wages are still a far cry from a living wage. An Indonesian wage study released by Global Exchange shows that 332,000 rupiah/month ($37.50US) is needed to cover the basic needs of one person. A living wage, which is a wage that helps cover the needs of a family, not just one worker, would be twice this figure, or 664,000 rupiah/month ($75US).

Moreover, Vietnamese and Chinese workers still get poverty wages. In all three countries, $4 a day would be considered a decent wage. Nike, a company with $8.7 billion in revenue in 1998 that sells its shoes for $150, can well afford to pay its workers such a meager sum.

Has Nike fulfilled its promise to allow independent monitoring of its factories?

In May 1998 Nike announced that it would allow independent monitoring of its factories. However, its definition of independent monitoring includes the use of for-profit accounting firms such as PriceWaterhouseCoopers and Ernst & Young. Anti-sweatshop activists feel these firms do not have the trust of workers and are too beholden to Nike to be considered independent. Nike has announced that in Vietnam it is using social scientists from the University of Economics in Ho Chi Minh City to help monitor factory conditions. And in April 1999 it announced the formation of the Global Alliance for Workers and Communities, a grouping of business, public and non-profit organizations that is supposed to involve local NGOs in the assessment of workplace conditions through interviews, focus groups and worker surveys.

These initiatives are too new to be able to determine how effective they will actually be. Moreover, while independent monitoring is important for halting the most egregious abuses, it should only be a temporary measure. Workers themselves should be empowered, through their own organizations, to protect their rights.

Have there been significant improvements in safety and health?

Nike has made positive changes in the areas of environmental health and safety. In 1998 it announced a program to replace petroleum-based solvents with safer water-based compounds. In 1999, an independent expert was allowed to verify this in the case of the Tae Kwang Vina factory in Vietnam. The investigator found that the factory had substituted less harmful chemicals in its production, installed local exhaust ventilation systems, and trained key personnel on occupational health and safety issues. The report concluded that the factory had implemented important changes that significantly reduced worker exposures to toxic solvents, adhesives, and other chemicals.

However, it also noted that significant health and safety issues still remain. Workers in some sections of the plant still faced overexposures to hazardous chemicals, and to heat and noise levels. Respiratory illness rates remained a concern. The report observed that further steps were needed to bring this factory into compliance with US Occupational Health and Safety Administration (OSHA) standards, as pledged by Nike.

In a move indicating a new level on openness on Nike's part, the same investigator has been invited by the company to look at health and safety issues in any of Nike's shoe factories. Plans are underway to do this in several factories in Indonesia and China.

Is Global Exchange still continuing its Nike campaign?

Global Exchange did praise Nike's efforts to raise the Indonesian wage and improve health conditions. However, Nike still has a long way to go to meet the anti-sweatshop movement's call for companies to pay a living wage, allow independent monitoring in all factories, and ensure that workers have the right to organize into independent unions. We should therefore keep the pressure on!

 


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