Debunking the Myths in Nike's PR Blitz

Much has been made of Nike's exploitation of its overseas labor force in recent months. Local scrutiny has focused on the company in light of its $7.1 million athletic contract with UNC-Chapel Hill. In response, Nike has launched a public relations barrage aimed at improving their public image while concealing the true nature of their labor practices. It will be useful, then, to take a closer look at Nike's mythical claims regarding its overseas labor force:

Myth: The Nike Code of Conduct ensures safe and environmentally sound working conditions.

Nike's Code of Conduct, a document intended to ensure compliance with labor standards, is in many cases an unenforceable and virtually worthless piece of paper. An audit conducted by Ernst & Young of the Nike-subcontracted Tae Kwang Vina factory in Vietnam found, among other abuses:

0. The toxic chemicals toluene and acetone exceed the standard levels by between 6-177 times;
1. In one section of the factory, employing 2,000 workers, only 4 doors for ventilation and exit exist;
2. 77% of workers in one department are "getting respiratory disease";
3. Adequate protective equipment is not provided;
4. 48 of 50 randomly selected workers were "required to work above the maximum working hours."

Myth: Nike workers earn a living wage.

Nike makes this assertion based upon the findings of a study conducted in Vietnam and Indonesia by students of the Dartmouth business school, ignoring the fact that the students used interviews with factory managers and workers that management selected, not workers' actual pay stubs, to determine wage levels. Under such conditions, would one reasonably expect that a worker selected by management would be earning below the minimum wage, or that a manager would admit to criminal wrongdoing with respect to wage levels? In Indonesia, where the government admits that the minimum wage is insufficient to meet the minimum physical needs for one person, an increase in the minimum wage from $2.25 to $2.46 per day prompted a Nike spokesperson to say, "Indonesia could be pricing itself out of the market." Five months later, Nike terminated its relationship with four Indonesian subcontractors.

Myth: Nike workers are content with their jobs.

Nike cites the long lines of prospective employees at their factories, as well as the dismal alternative of subsistence agricultural work as evidence that Nike-subcontracted employees are happy with their jobs. Why, then, did 16,000 workers from several factories making Nike shoes in Indonesia go on strike in April 1997, where any form of labor unrest is likely to bring on beatings and incarceration from the repressive government? In Vietnam, researcher Dara O'Rourke notes that "not one of the workers I spoke with at Tae Kwang Vina (including office staff) was 'satisfied' with their pay."

Myth: The presence of Nike contributes to the development of Third World countries.

Nike claims that its global workforce of 500,000, mostly in low wage, high labor-intensive manufacturing jobs, is contributing much to the economic development of developing countries. Yet do low paying jobs under harsh conditions represent genuine development overseas, or prosperity for the privileged factory managers and executives who receive the fruits of such labor? Nike's manufacturing strategy has been to locate areas of lowest cost and harshest labor conditions, democracy and labor rights be damned. Though it claims to be interested in economic and human development, Nike refuses to settle a case before the Indonesian Supreme Court of 24 workers fired for organizing a strike. To settle the case would require Nike to offer back pay of less than $20,000, the cost of a half-second of a Super Bowl ad. Is Nike truly interested in development and human rights, or is it committed instead to lucrative development for the few and brutal development for the many?

To be sure, Nike is but one company operating in a larger international milieu of developing economies desperate to attract foreign investors, often at the expense of the human rights of their people. Nike's actions, like that of all transnational corporations, is perfectly rational in the logic of the global economy. But the high value Nike places on its relationship with UNC affords us an opportunity and a challenge as students, faculty, and consumers to demand a higher standard of a company that was originally attracted to UNC by those very same high standards.