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.