As evidenced by the change in action by Nike itself, the company does have a great deal of responsibility and

obligation in regards to the wages and working conditions of subcontracted employees working in foreign

countries. This responsibility and obligation is much more complicated than simply adhering to a principle or

ethical value of doing what is best, or treating others as we wish to be treated. Nike, like many other U.S. based

companies and other MNC’s (multinational corporations) sought out production facilities overseas, mainly in

Southeast Asia. Nike has been the easiest target of critics of this practice due to its size and success. Nike holds a

45 percent market share, resulting in almost $9 billion in annual revenue. Nike indirectly provides 500,000 jobs in

565 factories in 46 countries around the globe. At the most basic level, Nike is providing thousands of jobs to

people who would otherwise be unemployed or earning far less in these countries. To best understand the

responsibility and obligations that Nike has to these workers, it is best to consider the wages paid and the working

conditions as separate issues.

Working conditions in factories that Nike subcontracts with were summarized by a South Korean worker as “The

three D’s. It’s dirty, dangerous, and difficult”. Workers experienced conditions that were louder, hotter, and had

higher concentrations of chemical fumes than allowed by the Vietnamese government. In addition, workers often

didn’t use the safety gloves and masks that were provided because they thought it was too hot and humid to wear

them. Clearly the workers did not understand the serious, long-term health hazards these chemicals cause.

Managers in a Korean plant often physically abused workers who didn’t meet production quotas. They also forced

extra hours to be worked without pay to make up for the decrease in output, and even subjected these workers to

“phoi nang”, or sun-drying, where workers were forced to stand outside the plant in the direct sun as punishment.

Some level of universal standard must be applied in how MNC’s operate and treat labor in host countries.

Religious leaders have cited the need for humane treatment of everyone, and what you do not wish to be done to

yourself, do not do to others. DeGeorge and Donaldson outline principles and duties for MNC’s that they must

respect the rights of individuals and do no harm or contribute to existing deprivation or suffering. Ian Maitland

outlined three standards that apply to how a MNC could treat labor. Home-country standards would require a

MNC to pay equal wages regardless of the location of operation. Workers in an Asian factory would be paid the

same as in a U.S. factory. This model is dismissed by even most critics of “sweatshops”, as almost all incentive to
locate production capabilities in foreign markets are eliminated by this principle. In addition, these artificially high

wages would disrupt the local market and be out of sync with local the cost of living. Maitland’s second standard

requires a MNC to pay a “living wage”, even if it higher than what is paid by local companies. This principle argues

that providing no job at all is better than paying a wage that is less than what is needed for a worker and their

dependents to live with dignity. The “classical liberal standard” of Maitland implies that any wage is acceptable

provided that the workers are informed of the wages and working conditions and freely choose them. I would

argue that this is advisable for Nike only if the firm undertakes serious educational activities to inform employees

of the need to wear protective safety gear and also of the harmful effects of not doing so. At issue is whether

employees would choose not to work in these conditions when unemployment is often near 40 percent in the

areas where factories are located. This puts the importance of educating potential employees very high.

The same South Korean worker who described their factory job using the three D’s went on to say, “… (This) is

something people only do because they see it as an important and lucrative job. Nobody who could do something

else for the same wage would be here.” Regardless of the market, high-paying jobs often come with increased

risk. Factories in the U.S. cannot guarantee complete worker safety. Foreign factories that produce Nike shoes are

no different. These workers often earn twice that of a local farmer. Even in Indonesia, where the factory paid the

minimum wage, workers were among the higher-paid Indonesians since many people work for less than the

minimum wage there. There are lines or workers outside these factories to fill out an application to work there.

In summary, Nike has an obligation to ensure that workers in factories that produce its products are allowed

universal rights and choose to work there. Nike’s commitment to improve existing local employment conditions

should end there, however. Not only is it ethical to pay the local, prevailing market wage, but it might actually be

unethical to pay any higher, inflated wages. The effects of this could be reduced employment opportunities on the

whole. Certainly employees need to enter into any employment on their own free will and with an understanding

of any risks associated with the type of work performed. With that understanding, the local labor base will

determine if the wages are too low and choose other forms of employment if they are.