Nike okays pay rise for RI shoe workers

Nike okays pay rise for RI shoe workers

BEAVERTON, U.S. (AP): Nike Inc., responding to the Asian
financial crisis and criticisms of its labor practices, Thursday
announced a 25 percent minimum wage increase for its footwear
factory workers in Indonesia.

The monthly minimum rises to Rp 250,000 - about US$23 - from
the previous government-mandated monthly minimum of Rp 200,000,
or $18.

"We surveyed the workers about how much a basket of goods
costs, what their money buys now, and determined the financial
crisis was hitting them harder than in other parts of Asia," said
Nike spokesman Vada Manager.

About 30 percent of Nike's 70,000 contract workers in
Indonesia are paid the minimum wage, Manager said, adding that 20
percent earn in the Rp 300,000 range.

Nike's move had been expected.

At last month's shareholders' meeting, where the company came
under criticism for low factory pay, vice president for corporate
responsibility Maria Eitel said Indonesian pay would be raised
above the 15 percent minimum wage increase set by the government
last spring.

The $9.6 billion-a-year athletic shoe giant followed on the
heels of an action earlier this month by competitor Reebok
International, which increased its Indonesian wage 20 percent
over the government minimum.

"This is great progress. Just a year ago, the subcontractors
were not even paying minimum wage," said Medea Benjamin,
spokeswoman for the San Francisco-based human rights group Global
Exchange.

But Benjamin said Nike's increase is not enough to deal with a
financial crisis that has led to skyrocketing cost increases in
Indonesia for such staples as rice and fish. A study by the group
last month estimated the living wage is now about Rp 350,000 a
month.

"It would take less than 3 percent of Nike's advertising
budget to raise all their Indonesian workers to a living wage,"
Benjamin said. "It's chicken feed to them."