Nike's Cheap Labor

by Tim Glenn

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Many billion dollar shoe companies prefer not to do their own manufacturing. They subcontract production with foreign businesses in Asia where workers receive rock bottom wages. The shoe companies that are participating in this cheap act include Nike, Reebok, Adidas, Puma, Hi-Tec, and many others. All of these companies stick to their own advertising, product development, and distribution while contracting Third World factories to produce their products.
No company is paying or treating their workers better than another. This is because in an Asian factory you will see the rival brands rolling off parallel conveyor belts in the same factory. I have chosen to concentrate on Nike instead of other brands because Nike is the leader in its industry, not only in terms of market share, but in design, comfort, and advertising. Where Nike goes, other companies tend to follow.
In 1984 the $5.2 billion dollar Nike Corp. closed its last U.S. factory and moved its entire production to the cheap labor in Asia. Some 65,000 Nike U.S. shoe workers lost their jobs because of the move over seas (Putnam, Internet). Making these sport shoes does benefit developing countries. It brings money, jobs, and some skills are shared. However, Nike's target is not so. As Taiwan and South Korea democratized, unions became legal, and wages began to rise, Nike immediately began to look for new undeveloped havens of low wages. New operations were set up in Indonesia, China, Vietnam, Pakistan, and Thailand. Nike now has a work force of only 8,000 employees. The 350,000 people who make their shoes in Asia (Hua, "Nike Protest Charges Abuses of Employees.") are employed by subcontractors, not Nike.
In the past couple of years Nike has taken in and responded to criticism of its contractors' factories with a number of initiatives. The first one was their Code of Conduct for their contractors. The second was the hiring of Ernst and Young to independently monitor the Code of Conduct. Most recently, Nike has announced their plan to form a dedicated labor practices department (Connor and Atkinson, "Labour conditions in the sport shoe industry.") Nike's primary defense to charges of abuse of workers is that they do not own the Asian factories. They are run by subcontractors and they say they don't have control over them, even though Nike has control over each and every stitch that goes on in each product line.
Most of the shoe workers in Asia are teenagers and unmarried young women from ages 17 to 30. The average worker produces 4.3 pairs of shoes a day (Brookes and Madden, Internet.), and only gets the minimum wage of $2.50 a day in Indonesia. The daily livable wage in Indonesia is between $4.00 to 4.50, (Tanaka, "Protesters lace Nike labor practices.") yet Nike still pays minimum wage to the workers who make the shoes that sell for over $100. Certain conditions in Vietnam are even worse. Workers only make an average of 20 cents per hour, or $1.60 a day, when the cost of eating three simple meals is $2.10 (Nguyen, e-mail) plus other expenses such as shelter.
About sixty to seventy percent of Nike's overseas workers rent a room in the Nike dormitories. The rooms are all identical, one-story barrack like buildings which face each other in rows. The rooms are three meters by three meters, which are made of concrete walls and floors, where two or three young women live. Along with the small area to live in, a large number of people all use the same toilet and laundry facilities because the rooms are not equipped with these (Connor and Atkinson, "Labour conditions sport shoe industry").
The 30 to 40 percent of the workers that cannot fit in the dormitories live in very small run-down rooms, with someone else to keep the cost down. They do not own a mattress or a bed, so they sleep on the concrete or dirt floor (Goodman, "Slavery plain and simple").
Renting a room in Indonesia costs at least $6.00 a month. Clothing has to be purchased, and every now and then the workers have to buy a bar of soap and toothpaste. To stretch the paycheck, something has to be cut. Despite the constant hunger, it is usually the food (Herbert, e-mail).
In Indonesia no labor union may negotiate on behalf of its' workers without gaining government permission. Because of this, when Nike workers attempt even the most minimal organizing of a strike, Nike's contractors call in the military (Nike in Indonesia company seeks repressive situations, Internet). Since the military is on a payroll and is located less than 10 minutes away from the factories (Interview with Max White, Internet), it doesn't take long to settle things down. Not only is the military called in, but any workers that are fighting back against the low wages and abusive conditions are automatically fired.
Despite all of the illegal aspects of strikes in some of the Third World Countries, Indonesia and Vietnam had some very recently. In Indonesia workers burned cars and ransacked offices because they claimed the company wasn't paying them the $2.50 daily minimum wage. Nearly half of the 10,000 workers who work at the Tangerang factory, participated in the demonstration. On the same day, in Vietnam about 3,000 workers unhappy with their contract walked off the job for the day. It was one of the largest strikes in the nations' recent history (Hill, "Nike plant shuts after workers protest").
Many Nike shoe makers have complained about forced overtime. A quota is set for each worker, and if they don't reach it, they have to work unpaid overtime hours to make up for their slow work. Some workers complained that that the quota is set even higher whenever they reach it. This unfair system gives a new meaning to the Nike slogan "There is no finishing line" (Brookes and Madden, Internet).
Two factories operated a policy of employing workers with a training wage for the maximum of a 120 days, then laying them off to save money on fringe benefits and permanent employees. The long hours are just as unfair as well. Vietnam's labor laws say that the maximum number of overtime hours a year is 200. Nike workers are forced to work 500+ hours per year. If the workers refuse to work these long and hard hours, they are punished and receive a warning. Three warnings and they are fired (Brookes and Madden, Internet).
Many Asians think business is a lot like war. Nike's labor practices promote poverty, poor nutrition, frequent headaches, general fatigue, and neglect for the children of the workers (Nike: Nothing Has Changed, Internet). Many people may think that the factories are in bad shape. When actually Nike's factories are very well lit and clean because you can't make quality shoes in a rundown shack.
Nike and several other sporting goods giants announced a campaign to stop the production of soccer balls made by Pakistani children who work 10 hours a day and only earning pennies for it. Child welfare organizations estimate that 7,000 to 10,000 Pakistani children under the age of fourteen stitch soccer balls in their homes and small shops. Nike has taken drastic measures to stop child labor by making plans to build fifteen "stitching centers" over the next three years to put an end to the homemade soccer balls. (Newberry, "Companies kick out child-made soccer balls).
Not only are the wages low, but Nike workers have to put up with sexual and physical abuse. Several cases of abuse include: workers being locked inside a cage and placed before the entire compound for display (Chan, "Boot Camp at the Shoe Factory); workers being hit over the head by supervisors for poor workmanship; workers forced to kneel with their hands in the air for 15 minutes; workers having their mouths taped for talking; workers called dogs; workers cussed at; workers beaten over the head for poor sewing; workers hit in the face with rubber soles because the manager made a mistake in color; workers being shot with rubber bullets; workers forced to stand in the hot sun for extended periods while writing their mistakes again and again, like schoolchildren (Herbert, e-mail).
Women workers have complained about frequent sexual harassment from foreign supervisors. Even in broad daylight, in front of many other workers, these supervisors try to rub, touch, or grab female workers in their chests and buttocks (Nguyen, e-mail). Workers have also reported that the prettiest girls in each section are chosen by the managers as administrative assistants. The decision only has to do with looks, not how well the person works. The administrative assistants are sometimes sexually harassed and even molested by the managers and supervisors (Connor and Atkinson, "Labour conditions in the sport shoe industry").