Posts Tagged ‘living wage’

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…)

An Ethics Can of Worms, All Named “Nike”

August 26, 2011

Jack Marshall writes in his EthicsAlarms.com blog that I was “open[ing] an ethics can of worms” with the piece about Nike and its $4-a-day workers. He raises a terrific set of questions that need to be argued over before deciding whether a company doing international business is behaving ethically. They’re not easy to answer. I guess I’ll try them out on my business ethics students next month. Here they are

 Q: If workers agree to work for a given price, is the company’s obligation to pay them more?

 Q: Should any company pay less than a living wage for full-time work, whether or not desperate workers assent? (more…)

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…)


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