[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
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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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