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."