Nike's Sweatshops (2014)

Controversy

Nike logo

I'm sure almost everyone has heard of the brand Nike, seeing they are the dominant athletic brand around the world. However, the way these clothes and shoes are being produced are bringing up a great deal of controversy. Nike has offices around the world, but most of their factories that manufacture their products are located in Asia, more specifically, southeast Asia. Nike has numerous factories stationed in Indonesia with 171,000 Nike-affiliated workers and the third largest producer of Nike products. In Indonesia, the minimum wage was raised last year to the point where employees would be making $4 a day. Several Nike factories in the country have applied to be exempt from the new minimum wage law so they can continue to pay their workers a mere $3.70 per day. In attempts to stay exempt from this law, the company has hired high-ranking Indonesian military officers to force employees to sign a petition stating the company did not have to pay them the new wage.

Individualism
Milton Friedman was an Economist and Nobel Peace Prize winner who had the main focus on individualism. In his view "The only goal of business is to profit, so the only obligation that the business person has is to maximize profit for the owner or the stockholders."Under this particular view then Nike is being completely ethical and is doing the right thing. The less they can pay their employees, the more money the company can save, therefore the more cash into the pockets of the owners and stockholders. Imagine if Nike decided to shut down factories in Asia and started manufacturing products here in the United States with American workers, instead of paying employees $3.70 per day and all of a sudden paying employees the national minimum wage of $7.25 per hour. Even though the billion dollar company will have absolutely no problem staying profitable (very profitable) their profits would take a noticeable hit.

Utilitarianism

A Nike sweatshop in China, where workers are paid $4/hour

A man by the name of John Stuart Mill had a different approach called Utilitarianism. Under utilitarianism, the main focus is maximizing not profits, but overall happiness for as many people as possible. In this direct setting, this is the complete opposite of individualism in that Nike is being completely unethical. In this situation the easiest way to make everyone involved happy would be to raise the wages of their employees, actually even higher than the country mandated a minimum wage. Nike brought in over $25 billion in their last fiscal year if the company even raised the wages of their overseas employees to $5.00 per day who would really take a hit? I'm sure the executives and top investors for the company will still be able to afford their Bentleys, or buy a new mansion, and go on their numerous vacations, but perhaps their employees' lives might change more than they think. Maybe that extra $1.30 per day given to them will help in putting more food on the table of their families, or be able to buy new clothes or even start to put away and save some of their money. Raising the wages is the obvious choice to create the most overall happiness.

Kantianism
Immanuel Kant was a philosopher that developed the principles of Kantian Business ethics. Some of these principles include acting rationally, respect people, and be motivated by good will and doing what is right. Under these principles in this situation Kantianism goes along with Utilitarianism, or against individualism. One of the Kantianism principles states "don't act inconsistently in your own actions or consider yourself exempt from the rules" which is exactly what Nike is doing. Even though the country of Indonesia has raised the minimum wage where Nike would be forced to pay their employees $4.00 per day, for some reason they do not believe they should have to follow this law, and should be able to continue paying them less then what is required. Another principle states "respect people, their autonomy, and individual needs and differences" which is also not at all what Nike is trying to do. Minimum wage is not just a made up, random number, it is a calculated amount that the government feels is necessary for the employee to actually live on. Nike is trying to pay their employees less then this so how are they going to be able to pay for necessities? Obviously this is not at all doing what is right and I don't believe that Nike is "motivated by Good will" but more towards "motivated by their bank accounts".

Virtue Theory 

Propaganda image protesting Nike's sweatshop

The last theory discussed will be the Virtue theory. This theory is based on Aristotle's ethics, and focuses mainly on the character of the party and their decisions. The four main virtues of character are described as courage, honesty, temperance, and justice. Under this theory and this situation, the outcome is similar to the Kantian and Utilitarian theory's where Nike is in the complete wrong. Nike is showing absolutely no courage in standing for the right ideas and actions, actually their forcing the opposite, and honesty does not seem to apply to them either because their practices of hiring and treating employees is all wrong. Nike is boldly showing no self control in making it obvious all they care about is profits, they are being completely unfair to their employees. This situation shows a lot about the company and their character (or lack of character), Nike's overseas practices are completely unethical from every standpoint besides Friedman's individualism, which they are conducting perfectly.




References

Kavoussi, Bonnie. "Nike Factory In Indonesia Used Military To Intimidate Workers Into Giving Up Pay: Report." The Huffington Post. TheHuffingtonPost.com, 15 Jan. 2013. Web. 15 Feb. 2014. <http://www.huffingtonpost.com/2013/01/15/nike-indonesia_n_2481236.html>.

Marks, Kathy. "Nike supplier 'resisting pay rises' in Indonesia." The Independent. Independent Digital News and Media, n.d. Web. 15 Feb. 2014. <http://www.independent.co.uk/news/world/asia/nike-supplier-resisting-pay-rises-in-indonesia-8452946.html>.

Roberts, George. "Nike workers claim military paid to intimidate them." ABC News. N.p., n.d. Web. 15 Feb. 2014. <http://www.abc.net.au/news/2013-01-15/nike-accused-of-using-military-to-intimidate-factory-workers/4465058>.

Salazar, Heather. Business Ethics Lectures. WNEU. Spring 2014. "earnings." NIKE, Inc. -. N.p., n.d. Web. 15 Feb. 2014. <http://nikeinc.com/earnings>.