Posts Tagged ‘Indonesia’

Hooray for Apple CEO Tim Cook for seriously addressing labor issues in China. When will Nike follow suit?

April 2, 2012

 

Business ethics presents a dilemma when it comes to purchases from low-wage countries. Cheap labor in China makes cool iPhones for us, and cheap labor in Indonesia makes snazzy Nikes. But should an ethical person buy these products? More specifically, are Nike and Apple unethically exploiting the people who make the products they sell so profitably?

I’ve written before that Nike’s business practices are unethical, while Apple seems to be trying to do right by the workers who make its products. A January New York Times article highlighted abusive working conditions at Foxconn, a major supplier of iPhone and iPad parts in Shenzen, China. In response Apple requested an independent audit of Foxconn,and Foxconn announced an immediate pay raise.

Now the New York Times reports that Tim Cook, ,Apple’s CEO, has actually toured a Foxconn factory where its products are made, and the audit he requested has slammed Foxconn for over-long hours and dangerous working conditions. In response, Foxconn promised to make substantial improvements and bring their plants into conformance with Apple’s code of conduct.

The Times notes,

“Mr. Cook’s appearance at a facility where Apple devices are made was an illustration of how differently Apple’s new chief relates to an issue that first surfaced under his predecessor, Steven P. Jobs.

“Since Mr. Cook became chief executive last fall, shortly before the death of Mr. Jobs, Apple has taken a number of significant steps to address concerns about how Apple products are made.”

This is encouraging. Tim Cook looks headed in a very different direction than Steve Jobs, and very different from Nike’s Phil Knight and Mark Parker. Cook actually WENT there. (Thanks to Rick Cole for the link.)

I buy Apple products. I don’t buy Nike.

 

Nike’s unethical; Apple maybe not so much

February 27, 2012

 

Nike shoes are a bargain at $220 a pair. They must be, else why would hundreds of people have showed up Thursday at a Greenwood, Indiana, mall, according to the police report, “panicking to get to the front of the line” for the limited release of the $220 Foamposite Galaxy. The next day in Orlando it took a hundred deputies in riot gear to subdue a crowd waiting for the new Galaxy.

Similar riots attended Nike’s December release of the latest in the Air Jordan line, the $180 Air Jordan XI Concord.

The Air Jordans cost Nike about $16 to produce, giving Nike a gross profit of $164 a pair, or about 90 per cent, before marketing expenses. Shareholders have done well, as the stock price has increased over one hundred times in the last 25 years—in contrast, the Dow Jones average has gone up a factor of seven in that period.

The workers in Indonesia who make Nike shoes haven’t done nearly as well: they earn $4 a day—not enough to provide food, shelter, transportation, and health care. And they can only dream of someday being able to buy a pair of Nikes for themselves.

Nike could easily afford to pay a living wage—labor costs account for only $2.50 a pair. (more…)

What can a Nike worker in Indonesia do with a daily wage of $4.80? Rent a bare room, eat two meager meals, and ride to work. Jim Keady explains

October 20, 2011

Nike workers in Indonesia earn about 1,285,000 rupiahs a month, or about $4.80 a day. Jim Keady went there to find out what their earnings can buy. Here’s the result.

For comparison, 1000 rupiahs is about a dime. If the worker is single they can earn enough to rent a tiny room, buy two meals a day and a couple of small bananas, and have enough left over to pay their bus fare to work. If they have kids, tough luck.

Jim has been at this for fourteen years now. He’s begun to gain some traction with Nike. They used to say it wasn’t any of their business: Founding CEO Phil Knight famously defended Nike’s practice by disclaiming, “We don’t make shoes.”

Now Nike slowly follows Jim’s lead, gradually accepting some responsibility for some of the abuses Jim exposes.

Here’s an example of a recent kind-of-success: Nike acknowledging that workers were being forced to work unpaid overtime, then being pressured to keep quiet about it.

Hooray for Jim Keady.

Is it ethical for Nike to pay people who make its shoes $4.00 per day?

August 23, 2011

Athletic shoes used to be made in Massachusetts. Now they’re all made overseas; Nike’s come largely from Indonesia, where its workers* earn $4.00 per day, barely enough to pay rent, transportation, water, and two small bowls of rice and vegetables..

In the courses I teach on business ethics we wrestle with this question: is Nike’s behavior ethical? In Nike’s corner are those who believe what Milton Friedman wrote fifty years ago: that business’s only social responsibility is to increase profits while staying within the rules of the game. Their argument is buttressed by the fact that the workers take the jobs voluntarily, so they must think they’re better off than if they weren’t making Nikes.

On the other side of the argument are those who believe that it’s just not fair for Nike to sell a pair of shoes for $80 that cost roughly $16.25 to produce, including just $2.43 for labor. Were Nike to pay a decent wage to its Indonesian workers, say double the current rate, it would reduce its profit margin by only three per cent, from $63.75 per pair to $61.32.

One man, Jim Keady, has been hard at work for thirteen years selflessly trying to get Nike to treat its Indonesian workers decently. Jim has even lived in Indonesia on $4.00 per day to see if it’s really a “living wage.” It’s not.

Jim came by his passion to change Nike while studying theology at Saint John’s University, where he was fired from his job as assistant soccer coach (more…)

Obama’s mother’s story

May 20, 2011

Here is a fascinating piece from the The New York Times Sunday Magazine, “Obama’s Young Mother Abroad.” It’s adapted from Times reporter Janny Scott’s new book, “A Singular Woman: The Untold Story of Barack Obama’s Mother.”

His mother and his upbringing are extraordinarily unusual. Good read.

Open Season on Muslims? Here in America? Read on.

August 23, 2010

Racial and religious prejudice and defamation will always be with us, although they are growing less acceptable socially. Call someone a nigger or dago or spic or kike and you’re out of the game. Write about how Jews control the banks and the media, or how the Civil Rights Act of 1964 has destroyed our schools and nice people will come down hard on you. But these same nice people have no such compunctions about spreading hateful misinformation about Muslims.

I got such an email just this morning, from a very nice person. It’s subject line was “Life is a Journey, Not a guided tour,” and it forwarded something called “Jihad watch, Islam Explained in Layman’s terms.”

I’m uncomfortable repeating the vile race-hatred but people need to see what’s circulating virally on the internet and through our society. So here are some of the “explanations,” quotes truncated but—I promise—all in context:

  • “Islam is not a religion, nor is it a cult. In its fullest form, it is a complete, total, 100% system of life. Islam has religious, legal, political, economic, social, and military components. The religious component is a beard for all of the other components…
  • “Islamization begins when there are sufficient Muslims in a country to agitate for their religious privileges…
  • “As long as the Muslim population remains around or under 2% in any given country, they will be for the most part be regarded as a peace-loving minority…
  • “At 2% to 5%, they begin to proselytize from other ethnic minorities and disaffected groups, often with major recruiting from the jails and (more…)

Nike takes in billions from official World Cup team jerseys made by $4/day workers

June 28, 2010

I watched the USA soccer team win its group in the World Cup, then lose to Ghana in the knockout round. Then I turned to my second favorite team, Brazil. I’m part of a World Cup television audience of more than a billion fans, and like most of them I lusted after the official team jerseys—a white USA shirt, perhaps, with number 10, Donovan, on the back, or a brilliant yellow and green Brazil shirt, also with number 10, Kaká. No, I think I like best the red and green number seven jersey of the world’s best player, Portugal’s Christiano Ronaldo. Seventy dollars for the home jersey, sixty for the more colorful away version. But I won’t be buying any.

All these official jerseys are made by Nike. Well, actually, Nike doesn’t make any sports gear. The shirts are made by a Nike contractor in Indonesia, whose workers earn $4/day, barely enough to pay rent, transportation, water, and two small bowls a day of rice and vegetables.

Nike long ago took the position that it has no responsibility for the pay or working conditions in the factories that make Nike gear, but over the past ten years it has slowly (more…)

U of Wisconsin rejects Nike business ethics

April 13, 2010

The admirable website, EthicsAlarms.com, praised the U of Wisconsin today for ending its contract with Nike, the result of a 15-year effort by my friend Jim Keady.

Keady’s 15-year effort to get Nike to take some responsibility for the workers who make products with the swoosh has included living for three months in Indonesia on $1.25 a day, the wage in a local factory that makes shoes for Nike. He’s a Jesuit-educated true believer in Catholic ideas (not necessarily practices) of charity.

Joe Lieberman’s “enemies” aren’t America’s

March 16, 2010

The flap intensifies over Israel’s announcement of
plans to build 1600 new homes in East Jerusalem. After strenuous objection from Joe Biden and the State Department , Prime Minister Netanyahu apologized for the timing of the announcement but not for the substance,  telling the Israeli Parliament that construction of Jewish housing in Jerusalem was not a matter for negotiation.

The New York Times quotes a senior administration official as saying, “What happened to the vice president in Israel was unprecedented. Where it goes from here depends on the Israelis.” But the Israelis seem intent on continuing to expand into East Jerusalem and more broadly into the West Bank.

The U.S. is in a difficult position, caught between the uncompromising Israeli ally on one side and  (more…)


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