Nike sweatshops

Nike, Inc has been accused of having a history of using sweatshops, a working environment considered by many people to be dangerous and difficult. Workers can be exposed to hazardous materials, harmful situations, extreme temperatures, and abuse from employers. Sweatshop workers often work long days, sometimes exceeding 14 hours, and earn pay far below a "living wage".^[1] Many people in developed countries compare the wages and the amount of labor of the workers in Nike factories to developed world standards. They claim that Nike unethically takes advantage of these labor markets. Nike has denied this claim many times, and expressed that they do not have any control over the factories. However, Nike has begun to pressure its manufacturers to improve working conditions.

Allegations

Nike has been accused of using "sweatshops" since the early 1970s, when it produced goods in South Korea and Taiwan. As their economies developed, workers became more productive, wages rose, and many workers moved on to higher paying jobs. Labor unions also gained more influence. Nike found cheaper labor offered in Indonesia, China, and Vietnam, which prohibited labor unions.^[2]

Throughout the 1990s, Nike was heavily criticized for selling goods produced in sweatshops. They originally denied claims against them. However in 2001, Nike director Todd McKean stated in an interview that the "initial attitude was, 'Hey, we don't own the factories. We don't control what goes on there.' Quite frankly, that was a sort of irresponsible way to approach this. We had people there every day looking at quality. Clearly, we had leverage and responsibility with certain parts of the business, so why not others?"^[3]

In 2005, protestors at over 40 universities demanded that their institutions endorse companies who use "sweat-free" labor, unlike Nike.^[4] Many of anti-sweatshop groups are student-led, such as the United Students Against Sweatshops. Team Sweat is one of the largest groups that specifically tracks and protests against Nike. Team Sweat is “an international coalition of consumers, investors, and workers committed to ending the injustices in Nike’s sweatshops around the world.”^[5], founded in 2000 by Jim Keady. Keady researched Nike’s labor practices while attending graduate school at St. John’s University in New York. Keady doubled as the soccer coach at St. John’s University, and while conducting his research about Nike; the school signed a $3.5 million deal with Nike, forcing all athletes and coaches to endorse Nike. Keady publicly refused to support Nike and was forced to resign in 1998. Since resigning, Keady has done original research into the effects of Nike’s Sweatshops. He travelled to Indonesia, worked in a Nike factory, and lived on the $1.25 wages.^[5]

Counter-criticism

Despite claims of exploitation for profit, in the past decade, Nike profits as a percentage of total revenue have ranged from only 1.94% to 10.11%. The median was 8.3% and the average was 7.77%.^[6]

William Stepp, of the Mises Institute, argued that minimum wage is arbitrary and causes unemployment. Stepp continues further, stating that the workers were not exploited and clearly received benefits from working at the factories "by showing up for work every day, and by accepting a paycheck based on mutually-agreed-upon terms." In addition to pay, these benefits include free annual physicals, uniforms and clothing, a clinic and health service, a canteen stocked with food, recreation and entertainment, and transportation. However, Stepp did criticize Nike for its association with the World Bank, which he says is the real exploiter of third world countries.^[7]

A study by the Global Alliance for Workers and Communities found that 70% of Nike factory workers in Thailand rated their supervisors as good and 72% thought their income was fair. In Vietnam, most workers "thought the factory was a 'good place to work' and planned to continue at least three years" and 85 percent felt safe there. Further, they felt that the factory offered a more stable career and higher income than farmwork.^[7]

Nike response

Nike began to monitor working conditions in factories that produce their products.^[8] During the 1990s, Nike installed a code of conduct for their factories. They spend about 10 million dollars a year to follow the code, adhering to regulations for fire safety, air quality, minimum wage, and overtime limits. In 1998, Nike introduced a program to replace its petroleum-based solvents with less dangerous water-based solvents.^[3] A year later, an independent expert^[who?] stated that Nike had, "substituted less harmful chemicals in its production, installed local exhaust ventilation systems, and trained key personnel on occupational health and safety issues."^[2] The study was conducted in a factory in Vietnam.

Recently, Nike has developed a program to deal with claims of unfair practices. Nike claims to have hired a staff of 97 people to randomly inspect several hundred of their factories each year.^{[citation needed]} Nike also gave the Fair Labor Association, a working conditions watchdog, the privilege to randomly inspect any factory that produces Nike products.^{[citation needed]}

Nike has audited roughly 600 factories since 2002, giving each a score on a scale of 1 to 100, which is then associated with a letter grade, A through D. Some factories received an A and most received a B. When a factory receives a grade of D or lower, Nike threatens to stop producing in that factory unless the conditions are rapidly improved. In 2004, Nike expanded their monitoring process to include environmental and health issues.^[8]

Other controversies

In 2000, Nike chairman Phil Knight planned to donate $30 million to his alma mater, the University of Oregon. When the University of Oregon joined the Worker Rights Consortium (WRC), Knight revoked his donation because the WRC has a history of being unfriendly towards shoe companies. The Fair Labor Association is supported by Nike and the United States government, while the Workers Rights Consortium is not.^[9] There has been debate between the university and Knight about the legitimacy of the FLA and which labor monitoring organization is more effective.

Another dispute arose from Nike’s personalization system, NIKEiD. MIT graduate Jonah Peretti attempted to order a pair of shoes from Nike. He chose to have the word “sweatshop” embroidered on them. Nike sent Peretti an email explaining that his personalization request could not be granted for one of four things: it contained another party's trademark or other intellectual property, the name of an athlete or team Nike does not have legal right to use, profanity or inappropriate slang, or was left blank. Peretti replied, expressing to Nike that his personalization did not contain content violating the aforementioned criteria. Nike responded by allowing Peretti to alter his personalization and Peretti chose not to change it and cancelled the order.^[10] Ironically, the publicity led to Nike selling more of the personalized shoes.^[7]

References

1. ^ "Sweatshop". Encyclopædia Britannica. http://www.britannica.com/EBchecked/topic/576470/sweatshop. 
2. ^ ^{a b} "Frequently Asked Questions". Global Exchange. 6 February 2008. http://www.globalexchange.org/campaigns/sweatshops/nike/faq.html. Retrieved 26 March 2011. 
3. ^ ^{a b} "Nike, Adidas Officials Discuss Sweatshop Issues". 3 December 2001. http://www.allbusiness.com/retail-trade/miscellaneous-retail-miscellaneous/4132441-1.html. Retrieved 26 March 2011. 
4. ^ Thottam, Jyoti (7 October 2005). "A New Push Against Sweatshops". TIME. http://www.time.com/time/business/article/0,8599,1115508,00.html. Retrieved 26 March 2011. 
5. ^ ^{a b} "Team Sweat". http://www.teamsweat.org/. Retrieved 26 March 2011. 
6. ^ Nike (NKE) annual SEC income statement filing via Wikinvest
7. ^ ^{a b c} Stepp, William (14 March 2001). "Nike is Right". Mises Institute. http://mises.org/daily/628. Retrieved 26 March 2011. 
8. ^ ^{a b} Bernstein, Aaron (20 September 2004). "Nike's New Game Plan for Sweatshops". BusinessWeek. http://www.businessweek.com/magazine/content/04_38/b3900011_mz001.htm. Retrieved 26 March 2011. 
9. ^ Greenhouse, Steven (25 April 2000). "Nike's Chief Cancels a Gift Over Monitor Of Sweatshops". The New York Times. http://www.nytimes.com/2000/04/25/us/nike-s-chief-cancels-a-gift-over-monitor-of-sweatshops.html. Retrieved 26 March 2011. 
10. ^ "Department of Personal Freedom". shey.net. http://shey.net/niked.html. Retrieved 26 March 2011. 

See also

• Child labor

External links

• Nike, Inc.
• Team Sweat
• United Students Against Sweatshops