Nike pays its workers in Indonesia and Vietnam enough to meet their basic needs with money left over for discretionary spending and savings, professors at the Amos Tuck School of Business said yesterday.
According to data collected by Tuck students and professors, Nike pays workers at its Sam Yang and Chang Shin factories in the Dong Nai province of Vietnam $47 and $56 per month respectively, while monthly necessities like food, clothing and other essentials cost only $27.
Tuck professor Eugene Mihaly, who co-supervised the Nike-commissioned report, said the data "suggests that Nike workers living in Indonesia and Vietnam can more than make ends meet."
Nike, whose revenues increased to $2.7 billion dollars in the first quarter of fiscal year 1998, has faced a great deal of public protests over alleged labor and human rights violations ever since a CBS News "48 Hours" segment depicted inhumane working conditions in the company's Third World factories.
Nike has denied the charges, and company spokesman Jim Small said Nike pays all of its workers a salary equal to the minimum wage required by their country, and claimed average wages are five percent higher than the minimums.
Five Tuck students spent three weeks collecting data on the cost of living and average wages in Vietnam and Indonesia. The figure were then compared to the wages of Nike workers to determine if they were receiving adequate wages relative to the cost of living.
Using household interviews and questionnaires with Nike and non-Nike workers, the students determined that household expenditures averaged $27 to $56 per month in Vietnam. After deducting these expenditures from their salary, the study found that workers were able to save between $19 and $26 monthly.
Despite claims from human rights groups that the company pays Indonesian workers less than minimum wage, the Tuck study found the average monthly wage to be $96, well above the government mandated minimum of $66. The Tuck study found a number of the claims made in the "48 Hours" segment to be false, including Nike's "training wage," reported to be below the country's minimum.
The 48 Hours report also quoted daily food costs at approximately $2, but the Tuck study found it to be between 40 and 43 cents.
"Other studies were made by people with agendas," said adjunct Professor of Business Administration Eugene Mihaly, who co-supervised the report. "Our students had no bias against the company either way. They received no money from Nike."
Although Nike commissioned the report, Professor of International Business Joseph Massey -- who co-supervised the report and directs the Center for Asia & the Emerging Economies -- said students were not paid for their efforts. The company paid for economy airfare and lodging, but students paid their own food expenses.
Nike has hired a former diplomat, Andrew Young, to investigate the human-rights allegations made at their factories in Vietnam and Indonesia. Although the Tuck study did not investigate these issues, Mihaly did acknowledge them.
"To say there have never been abuses is false," he said. The study focused not on human-rights issues, but on domestic spending of factory workers.
Tuck students perform a variety of business analysis and research tasks for major corporations, including Nike, Disney, Citibank, Motorola and Hewlett Packard.
