Nike and Sweatshops

Is Nike Inc. an economic savior lifting Global labor standards or a cause in sweatshop labor motivated by profits? The debate over Nike’s Sweatshop factories has painted the company’s reputation many colors across the spectrum of global Labor Rights.

Nike apologists have managed to justify multi-billion dollar sponsorships of larger than life celebrities like Michael Jordan when their factory workers in Vietnam were paid $1 a day. Phil Knight, Nike Founder and Chairman, put this economic chasm in perspective when he said that Athletes earn so much, “because the markets have dictated that they get that money.” Knight continued that, “âÂ?¦the fact that they endorse our products allows us to sell more products and create more jobs.”[i] Though Nike is not a direct owner of the thousands of factories it contracts with, it’s hard to imagine many of these operations without Nike’s business. Knight inherited the pressure that Sweatshop activists were creating when in 1998 he accepted social responsibility for the conditions at these factories.

When Labor and Human Rights activists shifted their game in the 1990s, a full court press on Globalization made Nike one of the first targets. As Berkley Professor and labor advocate Dara O’Rourke wrote, “Nike has been on the hot seatâÂ?¦longer than any other multinational corporation, and its painstaking initiatives result in large measure from this pressure.”[ii] So what put Nike Inc., a company from Beaverton, Oregon, into cahoots with manufactures in places like Indonesia, Thailand and Vietnam? For one, Phil Knight’s founding principle for Nike’s forbearer, Blue Ribbon Sports, was to market low cost shoes from Japan competitively with high-end wear from Germany. Cutting manufacturing costs to profit on brand marketing was Knight’s plan for victory from the get go in 1962, and thirty years later he was “just doing it” with Michael Jordan and Bo Jackson.

Nike, leading the footwear industry, essentially rode the wave of cheap labor from Japan, but as their economy bubbled, much of the manufacturing moved to Korea, Taiwan and eventually Southern China.[iii] While manufacturing costs went down, Nike’s logo was busy ingraining itself in the Globalization of culture. Nike’s otherwise ingenious marketing and efficient production praised by the business press throughout the 1980s saw the tables turn. Their manufacturing in Southeast Asia was tied to what was dubbed the “Crony Capitalism” of Indonesian President Suharto’s regime. The dictatorship had attracted capital due to a “virtually union-free environmentâÂ?¦” that “meant low wages and big profits for foreign companies” reveals professor and author Dan La Botz.[iv]

This is where the AFL-CIO’s Jeff Ballinger discovered Indonesian workers making Nike shoes at poverty wages and put momentum behind activist movements from Nongovernmental organizations. Groups like Press for Change, Global Exchange, The National Labor Committee and United Students Against Sweatshops waged a war that Nike retaliated against no less. Its a two-sided coin for Indonesian workers though, as the country’s minimum wage increased more than 300% from under $1 a day to over $2 a day, “in large part due to large Multinational Enterprises such as Nike.”[v] This wage increase occurred gradually between 1988 and 1996 and may in part be why Nike failed to see any fault in their Southeast Asian operations until 1998. A earlier boycott of Nike in 1996 and subsequent establishment of the Vietnam Labor Watch, was prompted by national media exposure. “Nike landed at the center of the sweatshop debate after the CBS news program 48 Hours… detailed the abuse of Nike workers in Vietnam,” according to Amy Domini, author of Socially Responsible Investing.

The footwear and apparel industry could no longer dodge the issue of sweatshops as the anti-globalization movement gained media attention. Several corporate coalitions with private auditing firms were formed to address Sweatshop labor, including Nike’s, among other corporate backing of the Global Alliance NGO and the Fair Labor Association. This was a step in the right direction, but hardly the independent monitoring of factories that critics were demanding of the industry. Nike hired pricey auditing from firms like Ernst & Young and Price Waterhouse who took necessary action, but critics largely deflated it as patchwork PR (See CorpWatch). In all fairness, on any given day, Nike employs 550,000 people at over 22,000 factories in 52 countries[vi], so if the company is genuine about enforcing manufacturing codes they should welcome all the outside help they can get. Though independent monitoring outside their control was something Nike resisted, and still does to an extent.

Nike’s response to the anti-sweatshop movement was a mixed bag of tricks, but they are often attributed with unprecedented transparency in the apparel industry. A factory that could offer lower manufacturing costs was historically a trade secret, but conditions that threaten the very lives of workers is a secret too dark to keep. Its safe to say that Nike executives, while concerned most with the bottom line, don’t want to be held responsible for human rights violations. Another point Domini makes in Social Responsible Investing is that, “corporate responsibility for the existence of sweatshops is only just beginning to be understood.” As increased pressure on Nike sparked more investigations, reports came in from Vietnam, China, Taiwan, Indonesia, Pakistan, Brazil and Mexico. Allegations ran the gamete from forced labor, child labor, abuse, health, safety and environmental violations. Adamant critics like Medea Benjamin of Global Exchange and Tim Conner of Oxfam strived to keep one step ahead of Nike’s supposed progress in addressing sweatshops. When Phil Knight was asked if he is confident child labor is not used, he said “absolutelyâÂ?¦its hasn’t been a problem at Nike factories”[vii], but its frequently been shown otherwise. Knight has had to admit to this mistake when Nike’s use of child labor made national coverage in the New York Times in the manufacturing of soccer balls. Nike’s use of child labor in sweatshops was also revealed by a BBC report from Cambodia in 2000 and by the Worker Rights Consortium at the Kukdong Factory in Mexico in 2001, according to Conner’s Global Exchange report.

It was United Students Against Sweatshops and the National Labor Committee that formed the Worker Rights Consortium. The WRC is a voluntary member based NGO that attempts to provide truly independent factory monitoring as opposed to the corporately backed FLA. This really drove Nike to play hardball with the student anti-sweatshop movement, often withdrawing donations from Universities who joined the WRC. Nike even went as far as breaking apparel contracts with colleges if they joined the WRC, in what author Liza Featherstone described as industry being “truly threatened by the notion of a monitoring organization that it does not control.”[viii] When student protestors infiltrated Niketown stores across the country on USAS’s Nike Truth Tour, they were often met with legal, even physical retaliation from Nike.

What inspired such impassioned protests from students who once adorned Nike’s logo was in large part that Asian and South American worker’s risked more than just their jobs in attemped unionizing. From the outside looking in, factory jobs may have seemed like a ticket out of poverty, but activists revealed another voice in the truth of oppressive sweatshop operators. Phil Knight once offered a defensive anecdote of 300 Vietnamese workers waiting outside a Nike factory, hoping people would quit so they could replace them. Similarly Globalisation scholar Johan Norberg wrote that, “the most persistent demand Nike hears from the workers is for an expansion of the factories so that their relatives can be offered a job.”[ix] So it seems that there are hundreds of thousands quite grateful, some hopeful, for manufacturing jobs with Nike, but as a result responsibility of basic human rights comes with this role. In 1998 Nike addressed this by raising the bar in their original Code of Conduct from 1991, requiring stricter child labor limits of it’s contracted manufacturers. Yet, again and again critics have alleged that these codes are nothing but empty promises that just hang on the factory walls. Part of the issue in reaching viable implementation of codes is that big industry combats activists through a media filter, with limited government oversight. Since the time Kathie Lee Gifford professed her care for children, while critics chastised her for corporately influenced indifference, mass media has been the battleground of the sweatshops issue.

While Wal-Mart deflected blows by sacrificing Kathie Lee as a media punching bag, Michael Jordan managed to sit that play out. Jordan shifted any responsibility on his part to Nike’s accountability, while Nike pleaded no ownership of the perpetrating factories. This defense didn’t hold up long once the media grabbed hold of what Phil Knight called a “great sound bite”, that “resonated a bit.”[x] The opulent lifestyles of Kathie Lee, Tiger Woods or Michael Jordan were easy targets as Jordan himself earned more in one year just for endorsing a shoe than the entire “Indonesian workforce did for making them.”[xi] This fact alone gets at something Farzin Mojtabai reveals in his essay Athletes Shouldn’t Be Role Models [xii], and why everyone wants to be like Mike, indeed.

[i] Philip Knight Interview by Phil Ponce on The NewsHour with Jim Lehrer, May 13, 1998http://www.pbs.org/newshour/bb/business/jan-june98/nike_5-13.html
[ii] Fung, O’Rourke and Sabel, Can We Put An End To Sweatshops (Beacon Press, 2001) pg.24
[iii]Footwear Industry In USA, Report from Fashion Industry Information Services, http://www.infomat.com/research/infre0000246.html
[iv] Dan La Botz, Made In Indonesia (South End Press, 2001) pg. 35
[v] Hartman and Wokutch,”Nike, Inc: Corporate Social Responsibility and Workplace Standard Initiatives in Vietnam” in Rising Above Sweatshops (Praeger Publishers, 2003) pg, 147
[vi] Hartman and Wokutch,”Nike, Inc: Corporate Social Responsibility and Workplace Standard Initiatives in Vietnam” in Rising Above Sweatshops (Praeger Publishers, 2003) pg, 145
[vii] Philip Knight Interview by Phil Ponce on The NewsHour with Jim Lehrer, May 13, 1998http://www.pbs.org/newshour/bb/business/jan-june98/nike_5-13.html
[viii] Liza Featherstone and USAS, Students Against Sweatshops, (Verso Books, 2002) pg. 45
[ix] Johan Norberg “The Noble Feat of Nike”, http://www.johannorberg.net/?page=articles&articleid=53
[x] Philip Knight Interview by Phil Ponce on The NewsHour with Jim Lehrer, May 13, 1998
[xi] Andrew Ross, Low Pay High Profile: The Global Push for Fair labor (The New Press, 2004) pg. 18
[xii] Farzin Mojtabai, Athletes Shouldn’t Be Role Models, April 10th, 2006 , http://www.associatedcontent.com/article/26607/athletes_shouldnt_be_role_models.html

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