Minimum Wage and Nike Marketing Phrase

Nike is in many ways the quintessential global corporation. constituted in 1972 by former University of Oregon track star Phil Knight, Nike is nowadays ace of the leading marketers of athletic skids and app bel on the intendet. In 2006, the gamey society has $15 billion in annual revenues and sold its products in some 140 countries. Nike does non do any manufacturing. or else, it designs and markets its products, while spotting for their manufacture from a global net elaborate of 600 factories scattered around the mankind that employ some 650,000 people. This huge corporation has make Knight into one of the richest people in America.The Nike marketing phrase Just Do It has aim as recognizable in popular culture as its whoosh logo or the faces of its celebrity sponsors, such(prenominal) as Michael Jordan and Tiger Woods. For either of its successes, the company has been dogged for more than than a decade by ingeminate and hang inent accusations that its products are m ade in sweat stocks where role players, many of them children, slave aside in hazardous conditions for less than subsistence earnings. Nikes wealth, its detractors claim, has been built upon the backs of the worlds poor.To many, Nike has become a symbolic representation of the evils of globalizationa rich Western corporation exploiting the worlds poor to depict expensive shoes and apparel to the pampered consumers of the developed world. Nikes Niketown stores have become shopworn targets for anti-globalization protesters. Several nong everyplacenmental organizations, such as San Franciscobased globular tack, a benevolent rights organization dedicated to promoting environmental, political, and social justice around the world, have targeted Nike for tell criticism and protests.News organizations such as CBSs 48 Hours hosted by Dan Rather have run exposes on works conditions in alien factories that supply Nike. Students on the camp practises of several major U. S. universit ies with which Nike has lucrative sponsorship deals have protested against the ties, citing Nikes use of sweatshop labor. For its part, Nike has interpreted steps to counter the protests. Yes, it admits, in that location have been problems in some afield factories. But the company has signaled a commitment to improving on the mull(p) conditions.It take ons that foreign subcontractors meet stripped thresholds for on the job(p) conditions and pay. It has arranged for factories to be examined by fencesitter canvasors. It has terminated contracts with factories that do non comply with its standards. But for all this effort, the company continues to be a target of protests and a symbol of dissent. The Case against Nike representative of the exposes against Nike was a 48 Hours enshroud that aired October 17, 1996. 3 Reporter Roberta Baskin visited a Nike manufacturing plant in Vietnam.With a shot of the milling machinery, her commentary began The signs are over of an America n invasion in search of cheap labor. Millions of people who are literate, disciplined, and desperate for meditates. This is Nike Town near what use to be called Saigon, one of quadruplet factories Nike doesnt own exclusively subcontracts to make a billion shoes a month. It takes 25,000 workers, or soly young women, to Just Do It. But the workers here dont piece of ground in Nikes huge profits. They work six days a workweek for only $40 a month, just 20 cents an hour. Baskin interviewed one mill worker, a young woman named Lap.Baskin told viewers Her introductory occupy, even as sewing team leader, still doesnt amount to the minimum wage Shes come come out to 85 pounds. Like most of the young women who make shoes, she has fine woof but to accept the low wages and long hours. Nike says that it requires all subcontractors to adjust local laws but Lap has already put in lots more overtime than the annual legal limit 200 hours. Baskin past asked Lap what would happen if she was sick or had something she needed to take distribute of, such as a sick relative, and needed to leave the factory?Through a translator, Lap replied It is not possible if you havent made copious shoes. You have to meet the quota before you can go home. The clear discount of the story was that Nike was at fault here for allowing such work conditions to persist in the Vietnam factory, which was owned by a Korean company. other gust on Nikes subcontracting fares came in June 1996 from Made in the USA, a foundation mostly financed by labor unions and domestic apparel manufacturers that oppose vacate pot with low-wage countries.According to Joel Joseph, chairman of the foundation, a popular line of high-priced Nike sneakers, the bank line Jordans, were put together by 11-year-olds in Indonesia making 14 cents per hour. A Nike spokeswoman, Donna Gibbs, countered that this was false. According to Gibbs, the average worker made 240,000 rupiah ($103) a month working a maxim um 54-hour week, or about 45 cents per hour.Gibbs also renowned that Nike had staff members in each factory observe conditions to make accepted the factory ob heart and sould local minimum wage and child labor laws. Another example of the criticism against Nike is the following extract from a newsletter create by Global Exchange5 During the 1970s, most Nike shoes were made in South Korea and Taiwan. When workers there gained new freedom to organize and wages began to rise, Nike looked for greener pastures. It found them in Indonesia and China, where Nike started producing in the 1980s, and most recently in Vietnam. The volume of Nike shoes are made in Indonesia and China, countries with governments that prohibit self-governing unions and band the minimum wage at rock bottom.The Indonesian government admits that the minimum wage there does not provide enough to supply the basic needs of one person, let alone a family. In archean 1997 the entry-level wage was a miserable $2. 46 a day. Labor groups enumerate that a livable wage in Indonesia is about $4. 00 a day. In Vietnam the pay is even less20 cents an hour, or a spotless $1. 60 a day. But in urban Vietnam, three dim-witted meals cost about $2. 10 a day, and then of course there is rent, transportation, clothing, health care, and much more. According to Thuyen Nguyen of Vietnam Labor Watch, a accompaniment wage in Vietnam is at least $3 a day.In another(prenominal) attack on Nikes practices, in September 1997 Global Exchange make a penning on working conditions in four Nike and Reebok subcontractors in southern China. 6 Global Exchange, in conjunction with two Hong Kong human rights groups, had interviewed workers at the factories in 1995 and again in 1997. According to Global Exchange, in one factory, a Korean owned subcontractor for Nike, workers as young as 13 earning as little as 10 cents an hour toiled up to 17 hours daily in en lastingnessd silence. Talking during work was not allowed, wit h violators fined $1. 20 to $3. 0, according to the address.The practices were in violation of Chinese labor law, which states that no child infra 16 may work in a factory, and the Chinese minimum wage requirement of $1. 90 for an eight-hour day. Nike condemned the study as erroneous, stating that the report incorrectly stated the wages of workers and made irresponsible accusations. Global Exchange, however, proceed to be a major thorn in Nikes side. In November 1997, the organization obtained and then leaked a confidential report by Ernst & infantile of an audit that Nike had commissioned of a factory in Vietnam owned by aNike subcontractor. 7The factory had 9,200 workers and made 400,000 pairs of shoes a month. The Ernst & schoolboyish report painted a dismal picture of thousands of young women, most downstairs age 25, laboring 10 1/2 hours a day, six days a week, in excessive heat and racket and in foul air, for slightly more than $10 a week. The report also found that wor kers with skin or breathing problems had not been transferred to departments free of chemicals and that more than half the workers who dealt with dangerous chemicals did not wear protective masks or gloves.It claimed workers were exposed to carcinogens that exceeded local legal standards by 177 times in separate of the plant and that 77 percent of the employees suffered from respiratory problems. Put on the antitank yet again, Nike called a news conference and pointed out that it had commissioned the report and had acted on it. 8 The company stated it had formulated an action plan to deal with the problems cited in the report, and had slashed overtime, improved safety and ventilation, and reduced the use of toxic chemicals.The company also asserted that the report showed that its internal observe system had performed exactly as it should have. According to one spokesman This shows our system of monitor works We have uncovered these issues cl earliest before anyone else, and we ha ve locomote fairly expeditiously to correct them. Nikes Responses Unaccustomed to playing defense, Nike formulated a number of strategies and tactics to deal with the problems of working conditions and pay at subcontractors. In 1996, Nike hired Andrew Young, onetime U. S. mbassador to the United Nations and former Atlanta mayor, to appraise working conditions in subcontractors plants around the world.Young released a mildly critical report of Nike in mid-1997. After completing a two-week tour that covered 15 factories in three countries, Young informed Nike it was doing a good job in tr ingest workers, though it should do better. According to Young, he did not look on sweatshops, or hostile conditions I saw crowded dorms but the workers were eating at least two meals a day on the job and making what I was told were subsistence wages in those cultures. Young was widely criticized by human rights and labor groups for not taking his own translators and for doing slipshod inspectio ns, an asseveration he repeatedly denied. In 1996, Nike crossroadsed a presidential assign force designed to find a way of banishing sweatshops in the shoe and clothing industries. The task force included industry leaders such as Nike, representatives from human rights groups, and labor leaders. In April 1997, the task force denote an agreement for workers rights that U. S. companies could agree to when manufacturing abroad.The accord particular(a) the work week to 60 hours and called for paying at least the local minimum wage in foreign factories. The task force also agreed to establish an case-by-case monitoring associationlater named the Fair Labor Association (FLA)to assess whether companies are abiding by the code. 10 The FLA now includes among its members the Lawyers Committee for pitying Rights, the National Council of Churches, the International Labor Rights Fund, some 135 universities (universities have all-embracing licensing agreements with sports apparel companie s such as Nike), and companies such as Nike, Reebok, and Levi Strauss.In early 1997, Nike also began to commission independent organizations such as Ernst & Young to audit the factories of its subcontractors. In September 1997, Nike tried to show its critics that it was involved in more than just a ordinary relations exercise when it terminated its kindred with four Indonesian subcontractors, stating that they had refused to comply with the companys standard for wage levels and working conditions.Nike determine one of the subcontractors, Seyon, which manufactured specialty sports gloves for Nike. Nike said that Seyon refused to meet a 10. 7 percent increase in the monthly wage, to $70. 0, declared by the Indonesian government in April 1997. 11 On May 12, 1998, in a speech given at the National Press Club, Phil Knight spelled out in detail a series of inaugurals designed to improve working conditions for the 500,000 people that make products for Nike. 12 Among the initiatives Kni ght highlighted were the following We have efficaciously changed our minimum age limits from the ILO (International Labor Organization) standards of 15 in most countries and 14 in developing countries to 18 in all footwear manufacturing and 16 in all other types of manufacturing (apparel, accessories, and equipment. .Existing workers legally employed under the former limits were grandfathered into the new requirements. During the past 13 months we have moved to a 100 percent factory audit scheme, where every Nike contract factory will receive an annual check by Pricewaterhouse Coopers teams who are in particular trained on our Code of Conduct Owners Manual and audit/monitoring procedures. To date they have performed about 300 such monitoring visits. In a few instances in apparel factories they have found workers under our age standards.Those factories have been required to raise their standards to 17 years of age, to require three documents certifying age, and to redouble their ef forts to take care workers meet those standards through interviews and records checks. Our goal was to ensure workers around the globe are protected by requiring factories to have no workers exposed to levels above those mandated by the permissible exposure limits (PELs) for chemicals prescribed in the OSHA indoor air quality standards. 3 These moves were applauded in the business press, but they were greeted with a skeptical response from Nikes long-term adversaries in the debate over the use of foreign labor. While conceding that Nikes policies were an improvement, one critic musical composition in the New York Times noted Mr. Knights child labor initiative is a smoke screen. Child labor has not been a vast problem with Nike, and Philip Knight knows that better than anyone. But commonplace relations is public relations. So he screen.Child labor has not been a macroscopic problem with Nike, and Philip Knight knows that better than anyone. But public relations is public relati ons. So he have to keep a close eye on him at all times. The biggest problem with Nike is that its overseas workers make wretched, below-subsistence wages. Its not the minimum age that needs raising, its the minimum wage. Most of the workers in Nike factories in China and Vietnam make less than $2 a day, well below the subsistence levels in those countries. In Indonesia the pay is less than $1 a day.The companys flow rate strategy is to reshape its public image while doing as little as possible for the workers. Does anyone think it was an accident that Nike set up shop in human rights sinkholes, where labor organizing was viewed as a criminal activeness and deeply impoverished workers were willing, even eager, to take their places on assembly lines and work for next to nothing? 14 Other critics question the value of Nikes auditors, Pricewaterhouse Coopers (PwC). Dara ORourke, an champion professor at MIT, followed the PwC auditors around several factories in China, Korea, and Vi etnam.He cogitate that although the auditors found minor violations of labor laws and codes of conduct, they missed major labor practice issues including hazardous working conditions, violations of overtime laws, and violation of wage laws. The problem, according to ORourke, was that the auditors had limited training and relied on factory managers for data and to set up worker interviews, all of which were performed in the factories. The auditors, in other words, were getting an incomplete and sensibly sanitized view of conditions in the factory. 5 The Controversy Continues Fueled possibly by the unforgiving criticisms of Nike that continued after Phil Knights May 1998 speech, beginning in 1998 and continuing into 2001, a wave of protests against Nike occurred on many university campuses. The moving force behind the protests was the United Students Against Sweatshops (USAS). The USAS argued that the Fair Labor Association (FLA), which grew out of the presidential task force on sw eatshops, was an industry likewisel, and not a authentically independent auditor of foreign factories.The USAS set up an alternative independent auditing organization, the Workers Rights Consortium (WRC), which they charged with auditing factories that produce products under collegiate licensing programs (Nike is a high profile supplier of products under these programs). The WRC is backed, and partly funded, by labor unions and refuses to espouse with companies, arguing that doing so would jeopardize its independence.By mid-2000, the WRC had persuaded some 48 universities to join the organization, including all nine calmpuses of the University of California system, the University of Michigan, and the University of Oregon, Phil Knights alma mater. When Knight heard that the University of Oregon would join the WRC, as opposed to the FLA, he withdrew a planned $30 million donation to the university. 16 Despite this, in November 2000, the University of Washington announced it too wo uld join the WRC, although it would also retain its membership in the FLA. 7 Nike continued to push forward with its own initiatives, updating progress on its website. In April 2000, in response to pressure that it was still hiding poor working conditions, Nike announced it would release the complete reports of all independent audits of its subcontractors plants. Global Exchange continued to criticize the company, arguing in mid-2001 that the company was not living up to Knights 1998 promises, and that it was intimidating workers from speaking out about abuses.