Nike raises pay above minimum wage
Nike raises pay above minimum wage
SEATTLE (Reuters): Nike Inc., addressing a persistent public relations problem, said on Tuesday it will raise entry-level wages for workers at its Indonesian shoe factories concurrent with a government minimum wage hike.
The 6 percent raise for entry-level workers to about $29.50 a month is above the new Indonesian minimum wage of just over $26, according to a statement from Nike, the world's biggest manufacturer of shoes and apparel.
Nike, which has been accused of condoning sweatshop conditions at the Third World factories where its goods are produced, has taken a number of steps over the past two years to address critics' charges.
Nike Chairman Phil Knight, who was grilled in the recent Michael Moore film "The Big One" over the company's Asian factory conditions, last year unveiled a six-point plan to improve the health and welfare of the 500,000 people who work at factories under contract to the company worldwide.
While Nike does not employ its factory workers directly, it can control wages at the shoe factories because they produce only or mostly Nike products.
Nike last increased the entry-level wage at the 12 Indonesian plants in October to Rp 250,000 a month, or about $23 at then- prevailing exchange rates, compared with the government minimum of Rp 200,000, or $18.
The latest increase brings the entry-level wage to Rp 261,000 effective April 1 -- the same day Indonesia's government is raising the monthly minimum wage to Rp 231,000. Currently $1 is worth about 8,850 rupiah.
The company said about 25 percent of its 70,000 workers in Indonesia earn the entry-level wage. The remaining 75 percent earn between Rp 330,000 and Rp 350,000 a month, about $37.25 to $39.50, and will not get a raise next month, a Nike spokesman said. The company said it plans to begin reviewing Indonesian wage levels quarterly.
Nike also said it would implement a new minimum monthly compensation package for workers worth Rp 332,000 or $37.50 a month including bonuses, housing, health care, transportation and meal allowances.
The package is intended to cover 100 percent of individual workers' basic needs as determined by independent sources including Global Exchange, a human rights organization that has been among Nike's harshest critics.