Nike: The Sweatshop Debate Case Study

Nike is responsible for working conditions in foreign countries it sub contracts because it should vet the companies it is trading with in terms of its ability of manufacturing its products in conducive work conditions free of criticisms before it signs any contract with them.
Labor standards that Nike should hold the factories manufacturing its product include; Payment of wage which is commensurate with the labor provided which is competitive and not less than the minimum wage of the country it’s operating in. It should also comply with minimum age limit of the workers it’s employed in the factories as per the country labor law and ILO (International labor) Standard. The working environment should be safe and workers should put on protective gears whenever they are risks that the working conditions could pose a danger to their health. The factories should have a policy to compensate the workers in case of any accidents in the factory. The workers should be given freedom of association and a right to collective bargaining. They should again be no discrimination based on the gender, age, tribe or race at the work place.
Though the base pay for Nike is double the income of the half working population it is barely enough to meet their basic need. The Indonesian government admitted that the minimum wage there does not provide the basic needs of one person let alone the family. The labor group also estimated the livable age in Indonesia to be $4 a day compared to $ 2.28 basic pay by Nike. It is appropriate to criticize Nike sub contractors because what its paying them is not enough for daily basic need and it is not be justified as the very products the workers are making is raking in billions of profit for Nike.
Nike needs to make changes to its current policy. First it should vet all its sub contractors before it gives them any contract of manufacturing their products. They should satisfy them that they are able and will pay its workers competitive wages and adhere to all the labor laws and regulations of their countries. Second they should develop labor safety and working condition regulation in the factories which should be part of the contract and should be adhered to by subcontractors. This should be enforced through penalties to the non adherence such as fines and cancelling of the contracts. Thirdly it should work with all independent oversight groups such as WRC (Workers Rights consortium) to ensure that total quality management is practiced in the manufacturing of their products. Nike should make these changes even if it may hinder their competitiveness in the market place as it will improve its image to its consumers and will improve its sales in the long run.