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The price you pay for wearing nike....Nike has become the largest and most important athletic shoe company in all the world.
The company first started when two Americans noticed that lower-cost, high-quality Japanese producers were beginning to take over the US consumer appliance and electronic markets. They saw a gap in the market, as most leading footwear producers were making their products in America (a higher cost country). |
The two Americans started their label known as 'Blue Ribbon Sports' but later changed it name to Nike, Inc in 1978.
Nike developed a strong working relationship with two Japanese shoe manufacturers, Nippon Rubber and Nihon-Koyo, but as costs/prices increased in Japan over the course of the 1970's, Nike began to search for alternative, lower-cost producers.
In the early 1990's, Nike products were being manufactured in six Indonesian factories, employing more than 25,000 workers. Four of these factories were owned by Nike’s Korean suppliers. As Nike’s presence in Indonesia increased, the factories supplying its products (about six million pairs of shoes per year) came under greater scrutiny.
Reports by a variety of NGOs and labour activists claimed that these plants were rife with exploitation, poor working conditions, and a range of human rights and labour abuses. Many Indonesian shoe factories did not even pay the minimum daily wage (at the time, 2,100 rupiah or about US$1). They petitioned the Indonesian government for exemptions to the legal minimum wage, claiming it would cause them “hardship” to pay. According to official Indonesian government calculations, this minimum daily wage only covered 70% of the basic needs of one individual – let alone a family. Nike’s Korean suppliers were seen as especially stingy with wages and abusive to local workers. “One worker at Nagasakti Para Shoes, a Nike contractor, said that she and other Indonesians were ‘terrified’ of their South Korean managers:
Nike developed a strong working relationship with two Japanese shoe manufacturers, Nippon Rubber and Nihon-Koyo, but as costs/prices increased in Japan over the course of the 1970's, Nike began to search for alternative, lower-cost producers.
In the early 1990's, Nike products were being manufactured in six Indonesian factories, employing more than 25,000 workers. Four of these factories were owned by Nike’s Korean suppliers. As Nike’s presence in Indonesia increased, the factories supplying its products (about six million pairs of shoes per year) came under greater scrutiny.
Reports by a variety of NGOs and labour activists claimed that these plants were rife with exploitation, poor working conditions, and a range of human rights and labour abuses. Many Indonesian shoe factories did not even pay the minimum daily wage (at the time, 2,100 rupiah or about US$1). They petitioned the Indonesian government for exemptions to the legal minimum wage, claiming it would cause them “hardship” to pay. According to official Indonesian government calculations, this minimum daily wage only covered 70% of the basic needs of one individual – let alone a family. Nike’s Korean suppliers were seen as especially stingy with wages and abusive to local workers. “One worker at Nagasakti Para Shoes, a Nike contractor, said that she and other Indonesians were ‘terrified’ of their South Korean managers: