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Do most consumers shop with a social conscience? (Think about it. Are you aware of where the products you purchase are made and under what conditions they are manufactured? ) When consumers buy products, without knowledge of their origins, they could easily be breaching their own code of ethics. This is clearly seen in an assortment of industries. Each year hundreds of companies employ foreign labor for low wages and in terrible working conditions. For example, much public attention had been brought to Kathy Lee Gifford and her sweatshops overseas, as well as other unfair labor practices in third world countries.
One of the greatest participants in this mistreatment of workers is the Nike Corporation. To earn the maximum profit for their products, Nike exploits thousands of workers each year by offering them diminutive wages and the worst conditions to work under. When famous athletes endorse Nike and consumers continue to purchase their products, they only encourage and support these inhumane practices causing them to virtually go unnoticed (Greene, 1998). Last August Donna Greene of the New York Times conducted an interview with Dr.
Frederick Rudell, Associate Professor of Marketing and Chairwoman of the Department of Marketing and International Business at Iona College in New Rochelle, on the subject of shopping with a social conscience. Dr. Rudell, who has chaired the Environmental Concerns Committee of Ionas Peace and Justice Program for sixteen years, believes that each time a consumer buys a product he or she casts a vote for the company that made the product (Greene 1998). Dr. Rudell points out that companies respond well to what the consumers have to say, citing the environmental and health movements as examples.
The Nike Corporation, unsurprisingly, was mentioned several times during the interview. She criticized their labor practices and pointed out that until the public pressured Nike to change their ways, nothing would happen. I believe that more of the public pressure Dr. Rudell discussed needs to be put into action until Nike factory conditions are brought to humane standards (Greene 1998).
Indonesia is one of the main locations for these factories, as well as the rest of Southeast Asia. In these countries the minimal working age is fourteen, as opposed to sixteen in the United States. Even at the age of sixteen, though, the jobs one can perform in America are limited. Nike voluntarily made an agreement to only hire workers age sixteen and up. Despite this publicly announced agreement, Nike continuously had many children ages fourteen and fifteen working in their factories. In an interview with film producer Michael Moore, Nike founder and CEO Phil Knight was not even aware of what his companys labor practice regulations were.
Nike's Director of Labor Practices, Dusty Kidd, had to brief Mr. Knight on their policy in the midst of the interview. If the company CEO does not even know the labor practice regulations, how can the institution be following these rules at lower levels (Nike's New Labor, 1998, pA 18)? Recently, in response to the pressure put on Nike by the media, human rights activists, and concerned consumers, the minimum working ages were finally raised. At a press conference in Washington on May 12, 1998, Nike Chief Executive Phil Knight announced that the minimum age requirement for workers in shoe factories was going to be raised from fourteen to eighteen and the minimum age requirement for the apparel factories from fourteen to sixteen. Although these changes are a major step in the right direction, these new regulations do not apply to current employees.
The fact that this regalia does not apply to the present staff means that there are still children under the ages of sixteen and eighteen working in the factories. Nike only increased the age limits in an attempt to appease critics and human rights groups. Their image was beginning to tarnish, so Nike had to take action (Cushman, 1998, pD 1). The labor rights organization, Global Exchange, has harshly criticized Nike's work practices for several reasons. Ninety-seven percent of Nike's workers are in poor, third world countries.
Most of these laborers are women and children who work for around $ 0. 15 and $ 0. 20 per day. Companies in Asia paid workers in China and Vietnam $ 1. 60 a day and workers in Indonesia less than $ 1. 00 a day, when at least $ 3. 00 per day is considered the minimum living wage. Medea Benjamin, a spokeswoman for Global Exchange commented, These factories are sweatshops. Theyre clean, well-lighted sweatshops, but theyre still sweatshops (McCall, 1998, p 15).
Until public pressure was applied to Nike, women worked seventy-seven to eighty four hour weeks in Korean factories for mere cents an hour (Greene, 1998). This has occurred in part because Nike refuses to manufacture in the United States. They have not done so since 1984. According to Nike's own research, if they would begin manufacturing in the United States, the price of shoes would raise one hundred dollars a pair.
Mr. Knight said that his main objective has been to give the American consumer an assurance that those products are made under good conditions (Cushman, 1998, pD 1). American consumers could never be convinced of this without a wage increase and overtime hour decreases (Cushman, 1998, pD 1). On Tuesday March 23, 1999, Nike raised its entry-level pay by $ 1. 70 per month for Indonesian workers. This pay increase amounts to Nike spending a total of $ 37. 14 per worker per month.
This change only affects twenty five percent of the seventy thousand Indonesians that work for Nike. This change came only when the government expressed serious concern over the affects of the Asian financial crisis in their country. Coincidentally Nike's wage increase began on April 1, 1999, the same day the Indonesian government implemented a nation-wide mandate to increase minimum wages. This pay increase also came shortly after Nike announced that it earned $ 124 million (or $ 0. 44 a diluted share) during its third quarter. Ever since the Asian financial crisis has been spreading over the East, more and more Asians have been willing to take grim sweatshop jobs. These jobs have actually become the aspiration of the people living in the slums of Indonesia and Thailand (Kristof, 1998, pA 1).
The recent surge of unemployment caused by the financial dilemma has caused the employees to lose their main weapon in the battle for better conditions. Now desperate for jobs, the people cannot afford to be picky about their working conditions and wages. Even the measly wages and hazardous conditions offered in the sweatshops are better than the fate of living unemployed in the slums (Kristof, 1998, pA 1). A report from the Asian American Free Labor Institute in June of 1995 found that working conditions in factories that manufacture Nike products repeatedly have workers laboring for extremely long hours. Several situations proved that Nike nearly forced the workers to participate in overtime (which is most often unpaid). In September 1996 the Indonesian Legal Aid Institute (LBH) countered arguments by Nike spokespeople by showing concrete proof of overtime abuse.
The LBH presented and Indonesian womans pay slip for August that showed she had worked and average of four and a half-hours of overtime day (Connor & Atkinson, 1996). An Australian researcher, Peter Hancock, investigated Nike factories in West Java and found that they require workers to work twelve hour shifts everyday. In addition, they only receive two days off per month. These conditions are terrible to begin with, but the worst part is that they are basically forced overtime hours (as cited in Connor & Atkinson, 1996).
Mr. B. Athreya did a report on the conditions in factories making Nike sports shoes for the Asian American Free Labor Institute (AAFLI) in 1995. Athreya found that workers who did not show up for overtime were given ludicrous punishments. As he said, senseless punishments, such as having to apologize personally to everyone in the section for not having shown up, or having to stand at attention, or to run around the Nikomas compound (as cited in Connor & Atkinson, 1996). Besides the exhausting number of working hours, most Nike employees go home to even worse surroundings.
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