Facts About Nike Sweatshops

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While Nike is one of the most prominent brands in the world, it has also undergone one of the biggest public relations scandals of any Fortune 500 company. For a while, Nike’s brand was closely associated with sweatshops. Even before other companies began to think about their social reputation in a world obsessed with corporate social responsibility, Nike’s founders generated outrage because people in third world countries were being abused to make Nike shoes, soccer balls and other items. While most people know that Nike operated sweatshops, most people don’t have knowledge beyond that. They’re unsure of the details of Nike’s overseas operations. To cure that little problem, here are some facts about Nike sweatshops.

Sweatshop criticisms have existed since the 1970s
While it wasn’t until the 1990s that Nike’s overseas operations truly drew media attention, some criticism has existed since the 1970s. It was then that Nike began to take advantage of lowly paid labor in places like Taiwan and South Korea. During this time, those two economies were in economic destitution. Nike was able to open factories, producing its clothing and shoes at low costs on the backs of hard workers. Slowly but surely, the South Korean and Taiwanese economies started to develop. People moved on to higher paying jobs, leaving Nike to explore additional options.

Nike found solace in the post-war environment in Vietnam, where labor unions were banned. The company also opened factories in the People’s Republic of China, taking advantage of a lagging Chinese economy that had not yet experienced a middle class boom. Both of these countries had lax human rights records, so protecting labor rights was far down on the list of priorities. This allowed Nike to pay workers very little and spend even less on keeping the conditions in order.

Nike placed one degree of separation between itself and its factories
Nike’s leadership always contended that because Nike did not technically control the factories, it could not be held responsible for what went on there. While it is true that Nike did not directly own and operate these factories, it did have control over the wages and working conditions. Nike’s executives repeatedly used these defenses, but many in the public did not accept their explanations.

Universities helped bring more scrutiny to Nike’s operations
Because Nike depended so heavily on university sports contracts to market and sell its goods, students at several institutions had leverage over the company. During the 1990s and early 2000s, several student activist groups demanded that their schools work only with companies that would guarantee “sweat free” products. This caused a public relations headache for Nike and threatened one of the primary pillars of its marketing strategy.

Finally, in 2002, Nike agreed amid public pressure to begin auditing its factories. The company began investigating various facilities. It also put into place a Code of Conduct that sought to repair the company’s public image. While the company has improved its overseas operations, it is far from a leader in corporate ethics today.