Nike Shoe Factory Controversy Essay Research Paper

Nike Shoe Factory Controversy Essay, Research Paper

Nike Shoe Factory Controversy

There has been a lot of controversy lately about the working conditions and low wages in overseas Nike shoe factories. This controversy has affected thousands of overseas workers, hurt the economy of Indonesia, decreased the gross revenue generated by the Nike Corporation, and lowered the overall opinion of the corporation. Nike has worked diligently to combat this controversy and help find a solution to end this controversy and help everyone involved. The purpose of this research is to provide a clear view of the controversy, a history of the events that lead to it, and solutions for the whole ordeal.

In 1957, Phil Knight and Bill Bowerman met at the University of Oregon in Eugene. In the early sixties, they formed a company named Blue Ribbon Sports, which they ran from Knight s mother s laundry room. Then Phil Knight purchased two hundred shoes from the Japanese shoe company Asics. Knight and Bowerman designed the first two Nike shoes called the Cortez, named after the Spanish conquistador, and the Boston, for the Boston marathon. Business kept growing into the 1970 s; they changed the name to Nike, after the Greek goddess of victory. The swoosh design was made by Carolyn Davidson and was sold to Nike for $35.00. In 1973, Steve Prefontaine became the first major track athlete to wear Nikes. He helped to convert many athletes to wearing the young company s shoes. In the 1980 s, Nike decided to go public with 2000 shares of stock. Nike became the number 1 seller of shoes in Canada and the company reaches out and forms Nike International Ltd to service more than forty foreign countries. In 1985, the Nike Air Jordan court shoes are introduced with a whole line of apparel. With the Air Jordan, Nike is established as the technological leader in the industry. In 1987, Nike introduces a new ad campaign called the Revolution. In causes a lot of controversy due to the Cold War and fear of communism. Nike receives a small dip in their gross revenue. In the 1990s, Nike spends more than $100 Million in advertising alone (Acaria). In the late 1990 s, the popularity of what the industry calls brown shoes took off; these shoes took away twenty percent of athletic shoes sales and Nike s profits dropped 69% in the one quarter (Jenkins 1). Nike saw a few drops in revenue but overcame them and now this controversy has caused a drop itself.

The controversy about the conditions and wages in the Nike factories has several different parts and findings. There have been allegations that Nike has been dogged for most of the decade by well-documented charges that its closely controlled contractors pay sub minimum wages, prefer countries with regimes that suppress labor organizing, expose workers to hazardous conditions, demand long working hours and even physically abuse employees at Nike s Southeast Asian factories (Moberg). To break these allegations down some more, it has been alleged that 13-15 year old children have been working for up to 17 hours a day making the equivalent of $0.15 an hour. There were also allegations that there was physical and verbal abuse in the workplace. More than 2,000 workers (57% of respondents) indicated that they had seen workers being shouted at or mistreated by supervisors or managers. Examples of verbal abuse given by the workers included the Indonesian equivalent of phrases like Fuck You! You Idiot! , You Whore! and You Pig! Examples of mistreatment included wage deductions, having their ears pulled, being pinched or slapped on the buttock, being forced to run around the factory yards and having to stand for hours in factory yards (being dried in the sun ). Workers also complained that they are forced to work excessive amounts of overtime, that it is often extremely hot in work rooms, that access to drinking water is limited and that they receive very low wages (Bissell 1). To add to all these allegations, there were also allegations that there was bad air quality in some of the factories. There had been a violation of the OSHA guidelines for exposure to certain VOCs or volatile organic compounds. Over the years of investigation, there had been an improvement, but they fail to take in account the affect these toxic gases had on women s health, especially since women make up 80% of the workers (Bissell 12). The allegations regarding low wages are spread out throughout Eastern Asia. Workers at the Lian Thai factory in Thailand only receive the minimum wage of 162 Baht ($US4.25*) for working an 8 hour day and say they need about 200 Baht ($US5.25*) just to cover the basic needs of one person (Bissell 10). In Indonesia, the minimum wage first year worker only receives Rp250,000/month ($US34*). Though these allegations are very tough and have hurt Nike s revenue and could possibly hurt them more, there are some who have a different opinion on this sweatshop labor. Bill Buford says, Garment factories, occasionally referred to as sweatshops are a traditional feature in the immigrant experience in the U.S. While the pace is brisk, immigrants can find opportunity in sweatshops that they would be unable to find elsewhere (Buford 1). It has also been said that it is so difficult to control the rights of the individual countries so unstable as the ones mentioned. Ronald Blackwell calls Vietnam, China, and Indonesia, three of the most difficult countries in the world for ensu