Nike profits from world’s vulnerable

Nike began manufacturing shoes in Asia in the 1970s, primarily in Taiwan and Korea. When workers in those countries began to organize and demand better wages, Nike jumped ship, moving its facilities to China, Vietnam and Indonesia. During the past three decades, Nike has done an excellent job of finding countries in which workers are impoverished and disorganized and in which the government opposes workers’ attempts to unionize or improve their working conditions. The result of this practice has been fantastic profits for Nike — a record $795 million in 1997 — and big salaries for Nike executives like Chief Executive Officer Phil Knight. Labor and materials now cost less than 3 percent of the purchase price of many Nike shoes, but the price of Air Jordans certainly hasn’t dropped.
This is the background for Ian Maitland’s recent defense of Nike’s sweatshops. He claims what you’ve heard about the starvation wages and brutal working conditions in factories producing goods for Nike just isn’t true. Maitland cites various reports to the effect that factory workers are paid “decent wages” or “the country’s minimum wage,” and he asserts the conditions of work are “harsh” but certainly not inhumane or abusive.
Truth is the first victim when there is money at stake. Maitland doesn’t tell us the ultimate source of the accounts he cites, so it’s difficult to assess their veracity. But Nike has done a great job with smoke and mirrors in recent years: It has paid private accounting firms like Ernst and Young to inspect its factories and conducted highly publicized tours of selected installations, like the Pricewaterhouse-led all-expenses-paid tour for college students that Nike proposed in 1999. And naturally, if you get your information from factory managers, announce your visits well in advance and only talk to workers under the watchful eyes of their supervisors, then lo and behold! Workers are satisfied with their pay and working conditions are just peachy.
But allowing Nike to tell you what’s going on in its own factories is just letting the fox guard the henhouse. Luckily, independent sources of information exist: Visit Corporate Watch at or Global Exchange at, or read the New York Times’ 11/8/97 article on hazardous working conditions in Nike’s plants. There you’ll find reports based on interviews with real live workers conducted outside the factories, so workers need not fear reprisals.
You’ll discover for years Nike petitioned the Indonesian government for, and received, a minimum-wage exemption for its factories, on the grounds that paying the minimum would be a “hardship.” Further, many of Nike’s factories pay new workers a below-minimum “apprentice wage,” claiming the workers need several months to learn the job. In fact, workers are hustled onto the assembly line after a few hours’ training.
You’ll find hard numbers: 1,939 of the 2,300 workers interviewed at Nike’s Sung Hwa Dunia plant earn less than 300,000 Rupiah per month. This is below the Rp. 332,000 per month needed to cover one person’s basic needs in Indonesia, and far less than the wage needed to support a family. Only 1 percent of the workers earned Rp. 400,000 or above — despite Nike’s claims that 75 percent of its workers in Indonesia earn Rp. 400,000 per month. In Tae Kwang Vina in Vietnam, workers’ pay averaged 20 percent below Vietnam’s (already artificially low) minimum wage — again counter to Nike’s official claims.
Independent reports also document widespread hazardous and abusive working conditions. In Tae Kwang Vina, for instance, workers with no safety equipment and no training with hazardous materials were exposed to dangerously high levels of toluene, acetone and resin dust, resulting in respiratory disease in 77.57 percent of workers studied. Workers could be fired or fined for attempting to unionize, talking or taking too many bathroom breaks. Forced overtime is common, and reports of the physical abuse and sexual harassment of workers, who are overwhelmingly young women, continue to trickle out of the factories.
Nike’s plants in Vietnam, China, Indonesia and Bangladesh have been the target of numerous protests over wages and working conditions throughout the 1990s by workers who risk beatings and jail for these actions.
But even if these are the facts, Maitland says Asian workers freely take jobs at Nike’s factories, so what is Nike doing wrong? And doesn’t opposition to sweatshops just hurt the workers?
Call me old-fashioned, but I still believe in business ethics. One thing this means is companies and the people who run them should be held morally accountable for their actions. Now naturally, Nike doesn’t force anyone to work in its sweatshops. It doesn’t have to: The deep poverty and lack of alternatives faced by its workers take care of that.
Apparently, many Asian workers’ other options are even worse than working forced overtime under harrowing and abusive conditions for pennies a day, and Nike is more than happy to exploit that fact for its own gain. When Nike’s executives look at the desperation of people in these countries, they apparently don’t see human needs that call for compassion and assistance, but instead an opportunity to maximize profits by exploiting people when they are most vulnerable. Where I come from, this is called kicking a guy when he’s down.
Here’s an analogy: A few years ago, Hurricane Hugo decimated coastal South Carolina, leaving the residents in desperate need of basic necessities. Profiteers moved in and began offering these necessities, such as bottled water, at astronomically inflated prices. American public opinion was outraged at this shameless exploitation of those in need, as was the governor of South Carolina, who issued an emergency order banning price-gouging.
The lesson is when others fall into situations of need and desperation, there is something wrong with regarding their plight with a predatory and pecuniary gleam in one’s eye, rather than with compassion. This is called exploitation, and it’s exactly what Nike has done in its global search for the most vulnerable workers on earth. Nike can and should treat its workers better, much better. (How many Michael Jordan ads, do you suppose, would have to be sacrificed to pay all of Nike’s Asian workers a living wage?) Nike could easily continue to make healthy profits while providing humane working conditions and paying a wage that lifts workers out of abject poverty, and this is the goal of those who oppose sweatshops.
Maitland may be right that countries can graduate from sweatshops to “well-paid jobs,” but that change will only occur if workers and ordinary citizens, like you and me, declare that we’re not going to “just do it” any more.

J.D. Walker, Ph.D. is an instructional multimedia consultant at the University’s Digital Media Center. He welcomes comments to [email protected] Send letters to the editor to [email protected]