[Congressional Record Volume 142, Number 44 (Wednesday, March 27, 1996)]
[House]
[Pages H2934-H2936]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       NIKE'S RACE TO THE BOTTOM

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio [Ms. Kaptur] is recognized for 5 minutes.
  Ms. KAPTUR. Mr. Speaker, in support of our ``Come Shop with Me'' 
campaign, the New York Times fortunately ran a story this month on the 
business page with the subtitle ``Low Wages Would Foreign Business, But 
the Price Is Worker Poverty.'' The story, which I will enter in the 
Record tonight, describes how a 22-year-old Indonesian man named 
Tongris was dismissed from his job making Nike shoes for export to the 
United States because he was organizing his fellow workers to demand 
more than the government-dictated poverty wage.
  How much was Tongris and his co-workers getting paid to make Nike 
shoes? Twenty cents an hour. And that is with no benefits.
  More than 5,000 workers turn out Nike shoes at this plant in 
Indonesia, shoes which often sell for over $100 a pair here in the 
United States. Nike and thousands of other manufacturers have been 
lured to set up business in Indonesia by the pitifully low wage level, 
along with the assurance by the Indonesian government that it will 
tolerate no strikes or independent worker associations. But as the 
Indonesian government itself admits in the article, it sets its wage 
purpose fully extremely low to only provide the minimum calories the 
worker need to survive each day.
  My friends, this is no different from how plantation owners though 
about feeding their slaves. Feed them enough so that they will not die 
on the job. In fact, I remember visiting the Auschwitz death camp and 
reading the sign above the entry gate that read ``Work will make you 
free.''
  Nike would like you to believe that they are truly a great American 
company. Nike in fact has been spending

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over $250 million a year in advertising to sell you, the consumer, the 
message that they are a good American corporate citizen. Nike has 
virtually bought off the entire American sporting world. Just look at 
how many college coaches and athletes in the NCAA basketball tournament 
now being played have been paid to wear Nike's trademark, the Gold 
Swoosh. Your people across this Nation are literally killing people to 
acquire Nike products.
  The truth of the matter is, Nike does not produce one athletic shoe 
in this country, not one. It has shut down all its U.S. production 
while siphoning off billions of dollars in this marketplace through 
sales. But it employs 75,000 workers in places like Indonesia and 
China, hidden from view of the news media of this country. And they pay 
their workers exceedingly low wages, 10 cents an hour in China, 20 
cents an hour in Indonesia, work them 7 days a week, under complete 
control of those employers. And yet though the shoes cost only $6 to 
make and ship to the United States from Indonesia, we end being asked 
to pay up to $150 a pair.

  So it is fair game to ask who is benefiting from this kind of 
production system? It is not the American worker who is no longer 
employed making Nike shoes. It is not the worker in Indonesia or China 
who earns poverty wages. Finally, it is not the American consumer, who 
is being gouged to pay outrageous prices for Nike.
  As Hakeem Olajuwon, the star basketball player from the Houston 
Rockets courageously pointed out when he refused to endorse Nike shoes, 
he said, I saw the prices go from $40 to $90 to $150, and in full 
cognizance that people were dying for these shoes, including inner-city 
kids, the kids that Nike was targeting with their inner-city role 
models. There is one sports figure with a conscience in this country. 
Thank God for that.
  We as American workers and consumers could do one better. We could 
stop buying Nike shoes until Nike pledges allegiance again to the 
workers of this country and to its producers around the world. Is it 
not time we put a little bit of conscience back into corporate America?
  Mr. Speaker, I include for the Record the New York Times article.

               [From the New York Times, March 16, 1996]

                An Indonesian Asset Is also a Liability

                         (By Edward A. Gargan)

       SERANG, Indonesia.--Many days Tongris Situmorang, in his 
     blue baseball hat with a large X on the front hangs around 
     the gates of the enormous Nike sport shoe factory here, 
     talking to friends leaving the assembly lines at the end of 
     the work day.
       The gangly 22-year-old used to work inside the well-guarded 
     gates, but five months ago he was dismissed for organizing 
     workers to demand more than the 4,600 rupiah they are paid 
     each day, about $2.10, the Government-dictated minimum wage. 
     Then, after being dismissed, he was locked in a room at the 
     plant and interrogated for seven days by the military, which 
     demanded to know more about his labor activities.
       ``We went on strike to ask for better wages and an 
     improvement in the food,'' Mr. Situmorang explained ``Twenty-
     two of us went on strike. They told us not to demand 
     anything. They said we wouldn't get any money. But I have 
     sued to get my job back.''
       Low wages are a big attraction for foreign companies doing 
     business in Asia as high labor costs in the industrialized 
     nations make the manufacturing of many consumer goods 
     uneconomical. Like a wave washing over Asia, labor-intensive 
     factories have swept south and west as incomes and living 
     standards have risen from Hong Kong, Taiwan and South Korea, 
     across Asia to China, Vietnam and Indonesia.
       And across the region, businesses in developing economies 
     are felling pressure from workers like Mr. Situmorang to lift 
     wages. Clashes erupt between workers who want more and 
     businesses and governments that fear that rising wages will 
     drive away jobs to even-lower-wage countries. As strikes and 
     worker-organizing attempts have increased here, the 
     Government has taken a harsher line by cracking down on 
     workers with police and military force.
       For some companies, like Levi Strauss, worker complaints, 
     were enough to prompt it to leave Indonesia two years ago. 
     But others, like Nike, whose shoes are made in 35 plants 
     across Asia, have expanded in the region to take advantage of 
     cheap labor.
       For the Indonesian Government, the long-term solution may 
     be to find manufacturers of products that can support higher 
     wages. ``Our strategy is to improve our products so we are 
     not producing products that are made in China, Vietnam, India 
     or Bangladesh,'' said Tunghi Ariwibowo, the powerful Minister 
     of Industries and Trade. ``We cannot compete on wages with 
     them.''
       More than 5,000 workers churn out Nike shoes here, shoes 
     that often sell in stores in Asia, Europe and North America 
     for perhaps $100 a pair. Nike and thousands of other 
     manufacturers have been lured to set up business in Indonesia 
     by the low wages--and the assurance that the Government will 
     tolerate no strikes or independent unions.
       Yet even at a little more than $2 a day, there is a 
     widespread sense in Government circles that even that is too 
     high for Indonesia to stay competitive.
       As the Government tries to hold down wages--wages the 
     Government admits provide only 93 percent of the earnings 
     required for subsistence for one person--strikes and worker 
     organizing have increased. And with the increase in labor 
     agitation have come harsher crackdowns by the Government.
       A spokeswoman for Nike in the United States, Donna Gibbs, 
     said she was not aware of Mr. Situmorang's case or of the 
     detention and interrogation of workers for a week. However, 
     when pressed, she said, ``Our information is that workers 
     were not held for a week.''
       All the plants that manufacture Nike shoes in Asia, Ms. 
     Gibbs said, are owned by subcontractors, mostly Koreans. Each 
     subcontractor is required to adhere to a code of conduct 
     drawn up by Nike, she said, and managers from Nike are 
     involved in the daily oversight of subcontractors' 
     operations, including not simply quality control matters, but 
     the treatment and working conditions of the labor force.
       Nike's code of conduct, Ms. Gibbs said, requires compliance 
     with all local laws, the prevention of forced labor, 
     compliance with local regulations on health and safety and 
     provisions of workers insurance. She said she was unaware of 
     13- and 14-year-old girls working at the Nike plant here.
       ``Certainly we have heard and witnessed abuses over time,'' 
     she said ``and typically what happens is that we ask the 
     contractor to rectify the situation and if it is not resolved 
     we can terminate the business.
       Ms. Gibbs said Nike has four to six subcontractors in 
     Indonesia, a number that varies according to production 
     needs. She said the minimum monthly wage was 115,000 rupiah, 
     about $52.50, although the average was 240,000 ripiah, about 
     $110. For a pair of shoes costing $80 in the United States, 
     she said, labor accounts for $2.60 of the total cost.
       ``The problem is that the minimum wage does not provide for 
     minimum subsistence,'' an Asian diplomat here said. ``And 
     beyond that, the companies don't always pay what is required 
     by law. The level of unrest is not reported, but there are 
     lots of reports from around the country of strikes.''
       ``The philosophy of the minimum wage is to make sure the 
     minimum calorie need per day is fulfilled,'' said Marzuki 
     Usman, who heads the finance and monetary analysis body for 
     the Finance Ministry and was the first chairman of the 
     Jakarta Stock Exchange. ``That is the formula.''
       On April 1, the minimum wage is to rise in many places to 
     5,200 rupiah, about $2.37.
       ``There are so many labor strikes,'' said Apong Herlima, a 
     lawyer for the Indonesian Legal Aid Foundation who 
     specializes in labor cases in Jakarta. ``Employers always 
     call the police and they come and interrogate the workers. 
     Then, the workers are fired.''
       Because Indonesia's press treads carefully around sensitive 
     issues--and social unrest is among the tenderest of 
     subjects--it is difficult to gauge precisely the level of 
     labor unrest. The Government reported that there were 297 
     strikes last year, although it did not provide the number of 
     workers involved. Independent labor organizes insist the 
     actual number is far higher.
       ``The number of strikes is increasing,'' said Leily 
     Sianipar, a labor organizer in nearby Tangerang. ``Most 
     factories don't actually pay the minimum wage. 
     Garment factories should pay 4,600 rupiah each day, but 
     there is usually underpayment. So there are strikes. We 
     try to organize workers. The factory owners use the police 
     and the military to crack down. They try to intimidate the 
     workers.''
       The Indonesian Government recognizes only one Government-
     sponsored union, the Federation of All Indonesian Workers 
     Union. But most workers and independent activists maintain 
     that the Government union does nothing to represent 
     Indonesia's 40 million workers.
       ``Since they don't come from the bottom, and they aren't 
     elected by the workers, there is no hope for the Government 
     union,'' said Indera Nababan, the director of the Social 
     Communication Foundation, a labor education group sponsored 
     by the Communion of Churches of Indonesia. ``I don't think 
     over 10 years there has been any considerable change. The 
     workers have no rights here to argue for their rights.''
       Not far from the Nike factory here, Usep, a lean man of 25, 
     leaned against the cement wall of the tiny room he shares 
     with his 19-year-old wife, Nursimi. Together, said Mr. Usep, 
     who like most Javanese has only one name, the couple earn 
     about $4.10 a day--or $82 a month. Of that, they must pay 
     about $23 for the 6-foot-by-6-foot cement room they live in, 
     with the remainder for their food and other needs.
       A single bare bulb dangles from the ceiling, its dim glare 
     revealing a plain bed, a single gas burner, and a small 
     plastic cabinet. Their room, one of a dozen in a long cement 
     building, is provided with one container of water daily. If 
     they want more water, each jug costs 100 rupiah, about 5 
     cents.
       ``Of course we're not satisfied with this,'' Mr. Usep said, 
     his words coming quietly. ``We

[[Page H2936]]

     tried to talk to friends about this, but there is no 
     response. Probably they are worried they will lose their 
     jobs.''
       It is workers like these whom Ms. Sianipar has been trying 
     to organize for the last seven years, a task that entails the 
     constant risk of arrest.
       ``If we have a meeting, the police take us to the station 
     and want to know if we want to make a revolution,'' she said, 
     a laugh breaking over her words. ``We had a meeting here last 
     week and the police came. So we changed the topic of the 
     meeting, but they took me to the station anyway. The police 
     got angry and banged the table. But they let me go at 4 in 
     the morning. They had the idea that we were doing underground 
     organization.''
       Still, she admitted, the attitude of the police has 
     moderated somewhat over the years. ``Five years ago,'' she 
     said, ``we would have had much more trouble.''
       Not all foreign investors who use cheap Indonesian labor 
     have ignored workers' complaints. In 1994, the American 
     clothing company Levi Strauss withdrew its orders from a 
     local garment contractor after reports that the management 
     had strip-searched women to check if they were menstruating.
       But many factories that manufacture clothing, shoes or 
     electronic goods for American companies are owned by Taiwan 
     or Korean companies, and labor organizers contend that 
     conditions in these factories are much worse than in 
     factories directly owned by Americans.
       ``American companies are here because they have to pay very 
     little,'' said an American who works for a private aid 
     organization, but who did not want his name used. ``But 
     American companies are not the worst violators of basic 
     working conditions. The Koreans really stand out for poor 
     conditions in their factories.''
       Outside the Nike factory, Mr. Situmorang continues his 
     vigil, waiting for a court decision on whether he can get his 
     job back. ``I've gone to the labor department and the 
     court,'' he said. He paused and sighed. ``I really don't 
     think in the end I will get my job back. This is Indonesia.''

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