Most people are familiar with the Nike logo. Most people also know that Nike is a multi-million dollar company that sells name brand shoes worldwide. Millions of pairs of Nike shoes are sold daily, but what people don’t know about Nike shoes is how and where they are made, who makes them, and how Nike spends its money in this process.
According to the “Sweatshop Fact Sheet,” Tiger Woods is paid over fifty five thousand dollars a day to be their spokesman. Another famous person that is a spokesman for Nike is Michael Jordan. According to the article “Running Away With the Profits,” (Environmental Action, Academic Search Elite), Michael Jordan is paid twenty million dollars in endorsement fees. Big name sport teams advertise Nike to appeal to the common person.
Indonesia is one of many countries around the world that is home to numerous Nike factories. Indonesia is a third world country of 214 million people. The main part of the economy is farmers, with half of these being the labor force. This happens to be an ideal country of choice for Nike to set up their factories for manufacturing their shoes. It allows Nike to take advantage of the local people. These people need to work in these factories to make a living, and they are stuck with the poor working conditions that Nike has provided.
One way in which Nike is taking advantage of their workers is through long and hard work hours. According to the article: “We are not machines,” the Nike’s code of conduct states that the employees in their factories can only work sixty hours a week, and it’s mandatory to have one day off per seven days worked. The task force in the article went in and interviewed the workers at the Nike factory in early 2001 and found that workers’ weeks consisted of seventy hours and more. This depended on the seasonal orders that the workers were obligated to fill. The top worker was working 84 hours a week. When asked if this worker wanted to work this amount of hours, his reply was no. Another worker stated, “Although overtime is voluntary in my factory, it is forced by nature, since we cannot survive without it.” (“We are not machines” article) He has to work this amount of hours or he can’t afford anything for his family.
Another thing that you might not know about Nike workers is the low pay they receive. The same report, “We are not machines,” also found that the average monthly range of pay was from $37 to $44. This averages out to 25 cents per hour. They are stuck working the long hours that Nike demands, or they loose their jobs. Nike says that they are meeting minimum wage standard, which is $2.28 per day, but the workers are working many more hours than required to earn this wage. They are not paying them for their overtime. It takes the average worker one hour of wages to be able to buy 1 kilogram of rice. The average farmer makes about a dollar a day, where the average factory worker makes about two dollars a day. Sure this is more money, but there is a catch 22. The catch 22 is that the factory worker puts in double plus hours each day, in poor working conditions, with no rights. They aren’t learning any basic skills for survival in their country, such as farming. Their children aren’t learning any basic skills either, because they send them away to live in another village with a relative. They basically can’t afford to provide day care while they work, nor the food to feed their children or themselves. The shoes that these workers are making cost Nike about five dollars per shoe, and on an average, they sell for one hundred dollars or more depending on the shoe.
The Nike workers also have to go through the workday in unhealthy work conditions. The process of making shoes involves many chemicals, and if these chemicals aren’t properly managed, the worker’s health is at risk. Dara O’Rourke, a trained health and safety specialist, was allowed in to inspect the Nike factories in Indonesia. He found excessive noise and heat. Levels of toxic chemicals were still present, but reduced. He found misuse of equipment and poor tracking of worker illness. Because of this investigation, Nike went ahead and introduced water based chemicals, which reduced the level of toxic chemicals. When they interviewed some more workers after this, they found that they still had health issues that were unresolved.
Another issue that these workers face is not having the right to form unions. According to the article, “We are not machines,” the workers not only fear for their jobs, but also for their lives, if they even talk about unions. There have been many cases in which workers have been threatened and fired. There was even a case where there was a murder attempt on a worker’s life related to the union. I think it’s pathetic that Nike, which is an American founded company, will not support union activities in their own factories.
Many people would ask the question: why is Nike hardly concerned about the welfare of its workers? This can be easily answered by looking at the global economy. The global economy consisted of many companies using third world countries as their base for their factories that make their products. All these companies are backed by the WTO. According to the article: “Ten Arguments against the WTO,” the WTO is not concerned with where a company manufactures its products or the conditions that it takes place in. The reason that Nike gets away with having factories as such in Indonesia, is that they are backed by the a very powerful world organization, the WTO, thus allowing Nike to make huge profits. Now I am not saying that Nike is free to do what they want. They have been pressured by many independent organizations, which fight for the rights of the factory workers, and the types of conditions described in this article. Because of this, Nike has made some changes throughout the years that benefit the workers, but it is still not enough.
In conclusion, it seems that Nike is making a huge profit at the cost of human live and dignity. Instead of spending millions of dollars on their workers, who are the backbones of making the actual shoes, they are spending it on their advertisements to promote their company. I realize that advertisement is essential to the success of a product, but it should not be at the cost of another human being to make a profit. I know that Nike is just one of thousands of companies that have taken their labor overseas, so that the product can be made at a fraction of its cost. Unfortunately the public sees Nike as a company whose product is worn by the rich and famous, therefore it is something that they would want for themselves. We the consumer enable them to continue this kind of business, because we buy the product. Through global media, we the public are becoming more aware of this kind of exploitation of workers. Overall, I think there is no pride to be found in companies that exploit their employees at the cost of a better profit for themselves. Awareness is going to be the key to hopefully fix it in the near future.
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Nike Company Analysis Essay
2938 WordsMay 22nd, 201312 Pages
Unit 6 Assignment 2
Michael G. Castro
MBA6008 – Global Economic Environment
February 15, 2013
Being the world’s leading innovator in athletic footwear, apparel, equipment and accessories, Nike holds to their mission to bring inspiration and innovation to every athlete in the world (Bowerman, 2011). Not only does Nike design, develop, and sell a slew of products and services to help athletes, they also market sports-inspired products for everyone else whom Nike classifies as an athlete because in their eyes, if one has a body, then they are an athlete. Nike’s main driver is in its emphasis on sports, however it is in the apparel…show more content…
Revenues for Nike in the China region increased by just a mere 2% in Q1 fiscal 2013 compared to a 15% increase in the same quarter last year (NIKE, INC., 2012). China’s economy continues to struggle as the GDP growth rate plummeted to 7.4% in the third quarter of 2012 (Dailymail UK, 2012). When compared to Nike’s overall 16% revenue growth, Europe (primarily the Western Europe region) has been slow. Contributing roughly 20% to Nike’s revenues, Western Europe last three quarters had a growth of -5%, 4% and 7%, respectively, compared to Nike’s growth figures of 11%, 16%, and 21% (NIKE, INC., 2012). It is believed that Europe’s weak economy is the culprit behind its slow growth. The United Nations reported that after Europe grew by 1.5 per cent in 2011, aggregate GDP is expected to contract by 0.3 per cent in 2012 with only a modest rebound of 0.9 per cent predicted for 2013 (UN, 2012).
Social Nike believes in in the awesome power of the human potential thus by using their size and reach, they can be a catalyst for long-term change that empowers support for local communities addressing the basic needs for health, safety and vitality; especially where they live, work and play (Nike Responsibility, Community, 2011). Nike, being the massive global company that they are, is enabling the “scaling up” of the power sport by using their employees, consumers and investors. Coming from simple, direct investment ventures that turn into widely adopted and