Posts Tagged ‘Nike’

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.

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…)

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.


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