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.