Nike Raises Wages of Indonesian Workers by 25% -- Under Threat of National Livable Wage Campaign for Holiday Season

Raising Wages of Nike's Workers in China and Vietnam Should be Next Priority, Says Global Exchange

SAN FRANCISCO, CA -- Nike, Inc.'s Thursday, October 15 announcement that it would that raise the pay for minimum wage workers in its Indonesia-based factories by 25 percent was in part motivated by the company's desire to avoid a heavily anticipated holiday season campaign targeting Nike's wage practices, say human and labor rights groups.

"We are heartened that so many Indonesian workers will be receiving a wage hike -- although this does not mark the end of Nike's responsibility on the wage issue," said Medea Benjamin, Co-Director of San Francisco human rights organization Global Exchange. Benjamin added that her group had called for an increase of 350,000 rupiah -- and that Nike workers in China and Vietnam continue to work back-breaking hours for below-subsistence wages.

The wage hike in Indonesia will increase the pay of about 23,000 workers, or 33 percent of Nike's 70,000 Indonesian employees. These workers, who currently earn 200,000 rupiah -- a little over $20, per month -- will now earn a base wage of 250,000 rupiah, or just over $25.

While Global Exchange acknowledged that Indonesia's suffering economy may have contributed to Nike's decision to raise wages, the company was also motivated by rumblings of a nationwide campaign scheduled for the end of this month to coincide with the holiday season. Called "Nike: Can You Spare a Dime?", the campaign would have asked students on college and high school campuses to send Nike a dime -- to represent a doubling of the hourly wage of a single Indonesian worker.

In September, Global Exchange and three Indonesian non-governmental organizations released a scathing report that found Nike CEO Phil Knight's compensation to be 5,273 times the annual pay of an average Indonesian shoe worker in 1997. The report underscored a resolution at this year's Nike's shareholders' meeting that would have reviewed Knight's compensation in relation to the wages of his Asian workforce.

"Consumers have made it untenable for Nike to continue to pay starvation wages to workers who make over-priced shoes. Nike has taken the first step, and we will pressure other companies in Indonesia to follow suit. But we will also continue to push Nike to make further increases until it reaches a living wage," Benjamin said.