Bos 200e - Case Write-Up: Hitting the Wall: Nike and International Labor Practices

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The wage issue appears to be the one that captures most attention from the public. In response to that, Nike organized for students from Dartmouth College to conduct ‘the survey of Vietnamese and Indonesian Domestic Expenditure Levels’, explaining about the “fair” wage in Vietnam. Through this survey, the students figured out that the salaries of the workers for Nike’s factories could not only pay for their necessities but also generate “discretionary income”. In addition, the survey showed that those salaries were not the primary sources of income in a household, and they were used to purchase luxury. The result of this survey can be the basis for Nike’s argument against allegations about its labor practices. Nonetheless, Nike should stand from another perspectives to look into the wage issues. The Nike’s workers in the study earned about $1.67 per day while the average sneakers Nike produced cost more than $100. This inappropriate proportion demonstrated that the workers were paid too little in comparison with the price of the product, making it an unacceptable labor condition.

From the year 1996 when Nike admitted its wrongdoings, the company has strived to improve the working conditions by joining in FLA and building training programs for its manufacturers’ managers. However, Nike’s effort has not been able to solve the problems completely. In 2008, more than 20,000 workers of a supplier for Nike went on strike to demand a raise in their wages since the average salary ($57) could not afford them to cope with daily life spending. Also, in the same year, Nike was accused of the practice of sweatshop in Malaysia, which once again attracted great attention from the public. Those incidents rationalize Ballinger’s doubt on Nike’s approach to eliminate labor exploitation: “If you present yourself as a fitness company you can’t very well go around the globe poisoning people. But on wages, they’re still lying through their teeth.”