Ethical Issues: Nike And Sweatshop Labor

The Ethical Issues The first ethical issue that is occurred in Nike is sweatshop labor. A "sweatshop" is defined by the US Department of Labor as a factory that violates 2 or more labor laws. Sweatshops often have poor working conditions, unfair wages, unreasonable hours, child labor, and a lack of benefits for workers. Nike has been accused of using sweatshops since the early 1970s, when it produced goods in South Korea, the People's Republic of China, and Taiwan. By the 1990s, disturbing stories were coming from many of the Nike factories throughout the world. Some described child labor, wages well below the poverty level and forced overtime. Others told of physical abuse from factory overseers, exposure to dangerous chemicals and poor air

Nike found cheaper labor in the People's Republic of China and Vietnam, which prohibited labor unions. When workers demanded additional rights and benefits in these countries, the Nike factories closed and moved to a different location that would enable them to continue operating at a low cost. Nike pays workers lower than the $45 monthly minimum wage in Vietnam. Most of Nike workers wages is around $1.25 per day. With respect to wages, one of the difficulties we encountered is that some workers are paid a set rate, while others are paid piece rate. Moreover, most workers are not even given their pay stubs, making it difficult for them to understand what hours they were paid and at what rate. When hired, the workers were told they had to work 12 hours a day. According to the Chinese Labor Law, the work day should only be eight hours long, and the four extra hours of work should be counted as overtime. However, the factories set the "normal" work day as 12 hours, and then add additional overtime work. Therefore, if a worker works a 15-hour day, he or she will usually say she worked three hours of overtime, when he or she really worked seven overtime