Meaning, Summary, Timeline & Issues (2024)

FAQs

What are the labor issues with Nike? ›

What is the main reason Nike is considered unethical? Nike has been criticized for using sweatshops in Asia as a source of labor. The company was accused of abusing its employees. In addition, some of the factories reportedly imposed conditions that severely affected their workers' restroom and water usage.

Nike, Inc. has been accused of using sweatshops and worker abuse to produce footwear and apparel in East Asia. After rising prices and the increasing cost of labor in Korean and Taiwanese factories, Nike began contracting in countries elsewhere in Asia, which includes parts of India, Pakistan, and Indonesia.

sweatshop, workplace in which workers are employed at low wages and under unhealthy or oppressive conditions. In England, the word sweater was used as early as 1850 to describe an employer who exacted monotonous work for very low wages.

Nike's sweatshop scandals and lack of transparency

Jeffrey Ballinger, an American labour activist, published a report on its Indonesian factories hiding unsafe working conditions, below-minimum wages, and even child labour. Early 2000s – The same problems were explored even further in the documentary Behind the Swoosh.

Our research highlights allegations of forced labour in the Nike supply chain, gender discrimination towards female athletes and parents, and failure to ensure all employees receive a living wage.

Nike sweatshops and its brand image

Nike had been accused of using sweatshops to produce its sneakers and activewear since the 1970s, but the issues really came into the spotlight in 1991 when activist Jeff Ballinger published a report detailing the low wages and poor working conditions in Nike's Indonesian factories.

In the 1990s, the Portland-based sportswear giant was plagued with damning reports that its global supply chain was being supported by child labor in places like Cambodia and Pakistan, with minors stitching soccer balls and other products as many as seven days a week for up to 16 hours a day.

They compare the work at Nike with the way they lived before, or the way their parents or neighbours still work. And the facts are revealing. The average pay at a Nike factory close to Ho Chi Minh is $54 a month, almost three times the minimum wage for a state-owned enterprise.

Who is Nike owned by now? Nike is a publicly traded company. It doesn't have a single owner, although co-founder Phil Knight is by far the largest shareholder, holding about a third of the stock.

Many also worked without contracts or minimum wage requirements, thereby allowing the company to reportedly fail to pay its employees properly. Channel4's documentary, Inside The Shein Machine, sent undercover cameras to film factory workers who were forced to pull 17-hour shifts to make hundreds of garments a day.

Are all sweatshops illegal? ›

Sweatshops operate illegally as part of the underground economy. They often are fly-by-night operations that can pack and move quickly from place to place, sometimes across state lines. Sweatshops flourish because of the huge competitive advantage they gain over legitimate businesses that: Pay fair wages.

This edition of "Better Beauty" explores the fashion industry's history of labor abuses. A new law could shift the U.S. into resolution.

Since the 1990s Coca-Cola has been accused of unethical behavior in a number of areas, in- cluding product safety, anti-competitiveness, racial discrimination, channel stuffing, dis- tributor conflicts, intimidation of union workers, pollution, depletion of natural resources, and health concerns.

2002–present: Acquisition by Nike and new headquarters

In July 2003, Nike paid US$309 million to acquire Converse. In January 2013, Converse announced plans for a new headquarters building.

Concerns? Just Want to Chat? NIKE's good name and reputation result in large part from our collective actions. That means the work-related activities of every employee must reflect standards of honesty, loyalty, trustworthiness, fairness, concern for others and accountability.

Challenges and Nuances:

Competition: While dominant, Nike faces substantial competition from Adidas, Under Armour, and other sports brands. Competitive pressure can limit price increases and force product innovation. Consumer Power: While strong, brand loyalty has its limits.

Its largest revenue source is, unsurprisingly, footwear, which eclipses apparel and sports equipment by a sizeable margin. Shoes are fairly labor-intensive to manufacture, which, given the high cost of labor in the United States, makes their domestic production more or less untenable.

“At Nike, we believe in the Employer Pays Principle – prohibiting workers from paying fees for their employment – which is a critical component of a responsible supply chain and in eliminating forced labour risks in the industry and beyond.”

On July 19, 2021, S&P Global Market Intelligence published a report, Nike may run out of Vietnamese-made sneakers as COVID-19 accelerates, outlining supply chain disruptions the athletic apparel brand currently endures as a direct consequence of Vietnam's lockdowns.