Economic Impacts of Production of Nike Sweatshirts

By Kailey Morey

According to one of our sources (PhilStar), it claimed that just this past year in Indonesia, where Nike has set up factories because there they would have some of the lowest wages, the typical workers would make the equivalent of around $3.50 each day, $21 each week. I could not research further as to how long it takes to make one sweatshirt (to compare the consumer price per sweatshirt with the wage), however according to some of our other sources, it says that Nike is doing its best as a company in matching the prices of the local minimum wages as well. While that is good to not be paying less than the other locals, there is still a possibility that the local minimum wages could be improved overall as well, and that these workers are not receiving the full benefits they have earned. Some of the benefits of these workers were taken away when Nike struggled a bit economically, but Nike plans on bringing the benefits back when it is affordable to their budget entirely.

Also, with Nike choosing the more rural towns for their factories in Asia, providing employment for some of these people has helped their families from living further in poverty and pulled these families away from the typical malnutrition and illiteracy. These workers are said to have become productive citizens according to one article (PhilStar), in saying that these factory jobs stay fairly consistent economically for them and that they no longer have to heavily rely on charities and government assistance. Many of these workers would rather receive less than minimum wage than losing their work.

A manufacturing map on Nike’s website (Nike Map), shows that for Nike’s apparel production (only for collegiate products), there are 36 countries, 355 factories, and 341,726 laborers in the factories as of February 2014. Some of the countries with Nike factories for collegiate apparel production are within the United States, Thailand, Nicaragua, Sri Lanka, Italy, China, Vietnam, Turkey, Malaysia and Mexico. While economically, Nike strategically will pick locations for factories where they can gain the most profit, it can be seen from two different perspectives: that they are also providing income in some places where people need employment, or Nike can be seen as an unwanted intruder in places where factories are just causing more problems. These may be somethings to investigate further.

Using the same source (Nike Map), looking specifically into Indonesia’s production, there are 16 factories, 20,257 current workers, and an average of around 85% of those workers being women producing the collegiate apparel for Nike. The Point Loma Nazarene University’s golf team wears custom sweatshirts that are made in Indonesia. Using the above source (PhilStar) to further observe Nike’s compliance with meeting the local minimum wage requirements, according to this source (Indonesia Wages), in 2012 the minimum wages were adjusted, increasing at least 27%. Looking into the local wages in Indonesia, according to Indonesia Minimum Wages, $1087 was the average yearly income in US Dollars which was effective as of November 12, 2012. Dividing $1087 by the 52 weeks in a year, the minimum wage weekly was $20, which then would assume that Nike is actually paying their employees in Indonesia more than the minimum wage, at most likely a little more than $21 weekly (PhilStar).

PLNU Golf Nike Sweatshirt Tag
PLNU Golf Nike Sweatshirt Tag

However, the Point Loma Nazarene’s Baseball Team wears sweatshirts made in Vietnam. According to Nike Map, there are 31 factories in Vietnam producing collegiate apparel. If the same policy used in Indonesia to applying the same if not more minimum wage requirements to Nike’s factory workers is the same in Vietnam, (Vietnam Minimum Wages) the average annual income in US Dollars, effective as of January 1, 2014, is $614 in Vietnam, which would mean almost $12 is made each week – which is a little over $1 if they work all seven days each week.

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Economic Impacts of Production of Nike Sweatshirts

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