NIKE'S EXPLOITATION Of Third World Workers
Nike's contractors exploit their workers throughout Asia. One way that WE as ordinary citizens and consumers have of expressing our concern is through consumer action. If enough pressure is brought to bear by consumers, the head office will require their subcontractors to end the terrible exploitation of their workforce.
Founded in 1964, Nike has become the world's largest distributor of sports shoes. It accomplished its remarkable profitability by developing a strategy that shifted rewards away from those who actually make the shoes, to those who promote and market them. There are two key elements in this strategy:
1. Disconnect the corporation from its production side by contracting out all manufacturing.
2. Create a marketing empire. The idea is not simply to sell a shoe (which after all only costs about $1.20 per shoe in direct labor cost) , but to sell a "lifestyle choice", an image of "hip", up to date, always in fashion and worn by "the best". Well you can sell a sneaker for just so much money…but A Dream!…well the sky's the limit!
· Nike's U.S. workforce is approximately 9,000. They are the marketers.
· Nike's Asian contracted workforce is approximately 500,000. They are the producers.
· Nike's CEO Phillip Knight is the sixth richest man in America.
· To match Mr. Knight's annual salary, a young Chinese woman would have to work nine hour a day, six days a week………………….for fifteen Centuries!
· Nike currently spends over $650 million on marketing - more than twice the wages of all 500,000 workers in Asia.
· The 60 million or so in contracts with Michael Jordan, Andre Agassi, and Tiger Woods alone would cover the annual labor costs of 115,000 workers in Indonesia.
Nike first moved its production operations to South Korea and Taiwan. But when workers began organizing in those countries, pressuring their respective governments to raise minimum wages, Nike began moving out. Their current countries of choice are China, Vietnam, and Indonesia which produce about 80% of Nike's shoes, These countries have repressive regimes and laws which prohibit formation of free trade unions.
About 80 percent of the workforce is composed of young women ranging in age from 15 to 28. Entry level wages range from $l.50 per day (Vietnam) to $2.50 per day (China and Indonesia). In Vietnam, the cost of three simple meals a day is $2.20. Only through forced overtime are workers able to sustain themselves and their families. This overtime may reach as much a 600 hours a year. That equals about 3 months of eight hour shifts!
Don't They All Do That?
Yes. But Nike is the worst abuser. In Vietnam, the average Nike worker receives $47.00 a month; Reebok pays $67.00, Coca Cola pays $80.00, and the State Sewing Factory #10 pays $90.00 a month. Bata, a Canadian firm, pays its workers more than twice as much as Nike. In addition, unlike others, Nike does not allow independent monitoring of its factories.
"Aren't these workers glad to have a chance to work in these factories?"
Yes---at first. Surprisingly (or perhaps not!) there is a high turnover rate. Nearly 75% of the workers fail to complete one full year of work. This situation has resulted in a new policy at a number of Chinese factories. It's called bonded labor. They now require a deposit equal to one month's wages before beginning work. The deposit will be returned only upon completion of one year's employment. Those who quit during the 6 month probation period will also trigger a month's loss of wages from the fellow worker who introduced them to the factory and served as guarantor, often a relative or friend.
A cruder example, reported by Anita Chin, an Australian sociologist, is to be found at "a Taiwanese-managed joint-venture factory [which] employs more than a hundred guards for 2,700 workers, one of whom died in an escape attempt.
What can I do?
It is surprising how powerful a consumer movement can be. The campaign has already forced Nike to hire Andrew Young and his "Good Works" consulting firm to report on conditions at its factories. He was accompanied by Nike representatives at all times and his report was, as was to be expected, favorable. Nike publicized this
"report card" with full page adds in major newspapers. Neither Nike, the "report" or Andrew Young touched on the issues described above - focusing rather on such things as "lighting" and "cleanliness". (There were actually falsehoods in that the "report" listed Global Exchange as well as Anita Chan as having been consulted. Both deny this.
Spread the word! Consumers have power! When shopping for sports shoes, let the sales people and managers of the stores know of your feelings about Nike's labor policies. It will help exert the needed pressure to finally force Nike to institute more humane work practices.
Much of the material in this fact sheet can be obtained from Campaign for Labor Rights :
http://www.compugraph.com/cir as well as http:/www.saigon.com/~nike/index.html