Nike: American dream on RI sweat

Nike: American dream on RI sweat

By Donna K. Woodward

MEDAN (JP): Once again Nike is in the news for its employee
relations philosophy and local compensation schemes. Nike
Indonesia's Manager Tony Naya responded in this paper to Jim
Keady's campaign against Nike for its treatment of its Indonesian
workers.

I respect Keady's experiment in trying to put himself in the
shoes (as it were) of the Nike workers by living for a month on
what Nike pays them. But it is Naya who does the disservice to
readers, by failing to address the issue illustrated so sharply
by Keady: Rp 10,000 (about US$1.20) per day is simply not a
living wage for a human being.

Naya seemed to suggest that Keady hadn't been candid about his
status as a plaintiff in a lawsuit against Nike, whereas in fact
this was made clear in the Sept. 5 news article on Nike workers.

Naya also claimed that because Keady came here with the stated
purpose of exposing the poor condition of Nike's contract
workers, his findings of exploitation are suspect. Naya, though,
offered no argument to this point. The Sept. 5 article did not
sound like a contention by Keady that Nike contributed nothing at
all to workers.

Yet Naya's rebuttal to Keady was simply a recital of Nike's
good works in Indonesia. Naya did not dispute Keady's message.
The message is that to enjoy even a marginally acceptable
standard of living (i.e. one that at the very least affords a
person a nutritious diet, shelter from bad weather and crime,
adequate personal hygiene, basic medical care, the ability to
achieve literacy and educate one's children), a person needs to
earn more than Rp 10,000 per day.

Those who are fortunate enough to work for large, prosperous,
export-oriented multinationals like Nike should expect to enjoy a
living wage. Shouldn't this modest principle be fundamental to
Indonesia's foreign investment policy-namely, that foreign
investment companies pay a meaningful minimum wage to their
employees?

In his letter Naya explained that Nike contractors raised
wages "... while being sensitive to local economic conditions."
Nonsense. This is euphemism. This so-called "local sensitivity"
is a hypocritical hoax with which multinational corporations try
to convince themselves and fool developing countries into
believing that the low wages they pay Third World workers are
morally justified.

Why is it acceptable to pay Indonesian landlords astronomical
U.S.-dollar rents that spoil the housing market for local
residents, yet not acceptable to pay the real creators of wealth,
Indonesian workers, what they deserve?

Why is it acceptable to pay lower-level laborers local wages
for manufacturing products that will be sold overseas at
international market prices? In the United States, Indonesian-
made rattan furniture or garments are not inexpensive.

Similarly, if shopping in the U.S. or in Singapore one can
expect to pay at least US$90 for medium-quality Nike sport shoes;
products made in Indonesia aren't discounted. To whom do all
those profits go? According to recent news someone is spending a
lot of money these days on imported luxury cars; it's not Nike's
contract workers.

Couldn't the division of corporate profits be more equitable?
This is the point of Keady's personal protest. More fairness for
the workers who create the wealth with which Nike pays its
superstar athletes tens of millions of dollars per year, and its
Indonesian contract workers less than $1,000 per year.

My support of Keady's position is not an argument for paying
all local workers the same rates their overseas counterparts are
paid; wage issues are too numerous and complex to be addressed
here.

The usual suspects like Henry Kissinger (who probably has
never even had to handle a mere Rp 10,000 banknote) will claim
that Indonesia and other developing countries would lose their
investment appeal if workers' wages rise too much.

An analogous argument against raising wages has been used by
business owners since the industrial age began. That logic was
proved erroneous in the early days of the labor movement and it
is still not valid.

With globalization already on the horizon, the arguments for
East-West or North-South wage gaps are even less defensible.
Traditional economic theories and development models -- those
that developing nations still seem seduced by -- created great
wealth for a small number and provided rather enough to the
masses to prevent revolution.

These are not the only choices. There are development options
to choose from which fall somewhere between Fidel Castro's and
the IMF's.

If Nike believes its own public relations, perhaps Naya will
accept this invitation to disclose via this newspaper Nike's
total annual 1999 wage bill for Indonesia's 110,000 workers.

To give us a clearer picture of workers' real situations,
report non-wage benefits separately; include 13th month salaries
but don't factor in things like free lunches, hospital insurance,
etc.

Then for comparison report Nike's worldwide 1999 pre-tax
profits; the total value of its Indonesian exports; and the total
amount Nike disbursed to its promotional sports stars in 1999.
Give us a true picture of how much Nike values the contribution
of its Indonesian workers.

Then, as further evidence of Nike's good faith, Naya might
take the initiative from Keady and himself invite Tiger and Magic
and other Nike athletes to spend an all-expense paid week, with
Keady as their guide, visiting Nike's contract workers in their
kampongs. How about it, Mr. Naya?

The writer is an attorney and former American diplomat at the
U.S. Consulate General in Medan, is president director of PT Far
Horizons management consultancy firm.