NIKE AND CATHOLIC SOCIAL TEACHING: A CHALLENGE TO THE CHRISTIAN MISSION AT ST. JOHN’S UNIVERSITY

January 20th, 2011

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Nike and Catholic Social Teaching:

A Challenge to the Christian Mission at St. John’s University

A term paper by

James W. Keady

For

Catholic Social Teaching

St. John’s University, NY

Spring 1998

When I first began my research for this paper I had no idea of the incredible journey it would lead me.  As a graduate assistant soccer coach at St. John’s University pursuing a master’s degree in pastoral theology, what started as a simple research paper hoping to link moral theology and sport turned into a hard life lesson in big money, power and politics.  Also, for the first time in my life I was awakened to the reality of attempting to live the justice of the Gospel.  Never in my wildest dreams could I have foreseen what would unfold from exploring the possibility that the Nike Corporation was a possible violator of Catholic Social Teaching.

To give a full account of what has transpired around this issue and the implications of such, I would have to write a book (and I may just yet).  The purpose of this paper is multifaceted and will focus on the following areas: 1) general background on the issue at hand; 2) raw capitalism; 3) Nike as an example of raw capitalism; 4) Nike as a violator of Catholic Social teaching; 5) Nike relationship with St. John’s University; 6) Saying no to Nike, a matter of conscience.

General Background Information

How did I get involved with an issue that would open my eyes to the stream of injustice that flows through our economic system, that would begin to stir the moral conscience of the largest Catholic University in the United States, and would force me to rethink my values and eventually put them to the test?  I have my friend and professor Paul Surlis to thank for this.  It was he who suggested that I attempt to find a topic for my research paper that would somehow link theology and sport.

As I searched and searched I met dead end after dead end.  Nothing quite grabbed me in a way that made we want to dig in and start writing.  Then, very casually, I became aware of a potential “issue” that was of interest to me.  In an edition of St. John’s Today, the official publication of St. John’s University, there was an editorial written by a fellow graduate student titled, “Michael vs. Vincent.”  The writer of this editorial was very generally questioning the business relationship that existed between St. John’s and the Nike Corporation.  A few days after reading this, I happened to read another article in one of the major New York publications criticizing Nike and their business practices.  My interest was now piqued; I had found my topic!  I did a few days of initial research and what I found astounded me.

The following week there was a response to the editorial in St. John’s Today by St. John’s Athletic Director, Ed Manetta.  I was shocked at what was included in this letter.  It seems he was attempting to exonerate both Nike’s business practices and the University’s relationship with Nike.  At this point I had only done limited research, but was already certain that in no way were Nike’s hands clean of misdoing.  I wanted to respond to Mr. Manetta’s assertions, but I wanted to have substantial evidence for the challenge I was going to make.

I assert that as a Catholic university we should not be benefiting from nor be a marketing agent for a company (Nike) that violates the social teaching of the Church and the mission of the university.  To this end I have done months of research that have led me to conclude the following.  1) The Nike Corporation has been one of the grossest violators of workers rights and the entire body of Catholic Social Teaching.  2) By St. John’s being in a contract with said corporation we are in violation of the social teaching of the Church, the Catechism of the Church, the mission of the University, and the social justice implications of the Gospel.

Raw Capitalism

To understand the issue at hand I believe one must first have a general understanding of why capitalism or raw capitalism is by its nature counter to the ethos of Christianity.  What is raw capitalism?  One might claim that raw capitalism results when the laws of a capitalist economic system are taken to their extreme.  It is capitalism without conscience.  It completely removes the human element; meaning that its sole concern is the maximization of profit not human or workers’ rights.  It is a machine of production that when put in motion seeks a strict bottom line with no regard for ethics.  Again, its only concern is the maximization of profit no matter what the cost to the environment or human beings.

If we look to CST for greater insight into how capitalism is defined we find, “…The position that defends the exclusive right to private ownership of the means of production as an untouchable ‘dogma’ of economic life.” (LE, section 14)  This position however is not completely supported by the Church teaching.  The right to private property is not “untouchable.”

“This right, which is fundamental for the autonomy and development of the person, has always been defended by the church up to our own day.  At the same time, the church teaches that the possession of material goods is not an absolute right, and that its limits are inscribed in its very nature as a human right.” (CA, section 30)

Unfortunately the reality that occurs is when the system behind this “dogma” is set in motion, what is created is an economic machine that has one goal, the maximization of profit.  In order to fully realize the potential of this goal it becomes necessary for all elements of the economic equation to be quantified or commodified.  This includes the commodification of human labor.  This in itself runs completely counter to the body of CST and the Christian ethic.  “The Church’s teaching has always expressed the strong and deep conviction that man’s work concerns not only the economy but also, and especially, personal values.  The economic system itself and the production process benefit precisely when these personal values are fully respected.” (LE section 15)

When we begin to see people as cogs in the machine of production, we run the risk of dehumanizing work and violating the Divine sanctity of those who are affected by such actions.  We must constantly keep in mind that work and the economy are for persons, and not persons for work and the economy.

“In truth, however, the economy is a human reality, not one that transcends human control.  The economy is a system set up by human choices, that should serve human needs, and that can be changed by human decisions.” (Thompson, 40)

We must as Christians continue to struggle to awaken people’s consciences to the fact that the “bottom line” is not the final measure of success.  What are most important is that all people are treated with basic human dignity and that their basic economic needs are met to ensure this.

The issues of raw capitalism and human work become particularly interesting and complex when dealing with multi-national corporations or MNC’s.

“MNC’s are central actors in the globalization of the world economy, that is, in the increasing integration of national economies into an international market.  They are not the pawns of any state, rich or poor, but independent actors, influenced by a global market which they in large part create and manipulate, and from which they profit.  The global economy has become fiercely competitive and unforgiving of efficiency; it seems to transcend the control of even the most powerful governments or corporations.” (Thompson, 40)

Although I agree with the spirit of the above statement, I think it necessary to clarify that MNC’s are not completely “independent” actors.  They do benefit quite a bit from their relations with the state, i.e. labor laws, use of military or police…  The reality that we are faced with then is MNC’s following the rules of the economic system to their extreme and the result is raw capitalism.  In doing this we see said corporations searching the world for the cheapest resources in which human labor is included.  By these actions “…a small number of very rich men have been able to lay upon the masses of the poor a yoke little better than slavery itself.” (RN, section 2)

In searching for the cheapest resources, i.e. labor, we are faced with the question of a just wage.  The logic of the system would have the dollar amount placed on wages to reflect whatever the market will bear and quite unfortunately, this is the reality that exists.  Recognizing this reality, it is our duty as Christians to seek out those who take advantage of the current system and exploit human workers.  We must continually struggle with this injustice and demand of corporations that they pay a just wage, a living wage.

What is a just wage or living wage?  Again we can look to CST for our answer.  A just wage is such that “…the remuneration must be enough to support the wage earner in reasonable and frugal comfort.” (RN, section 34)   More specifically, a just wage is one that would allow the earner to procure the following for themselves and their family: food, housing, clothing, health care, and education.

This issue of wages is of paramount importance.  So much so that Pope John Paul II makes the statement:

The key problem of social ethics in this case is that of just remuneration for work done.  In the context of the present there is no more important way for securing a just relationship between the worker and the employer than that constituted by remuneration for work…  Hence in every case a just wage is the concrete means of verifying the justice of the whole socioeconomic system and, in any case, of checking that it is functioning justly.  It is not the only means of checking, but it is a particularly important one and in a sense the key means.  (LE, section 19)

What we see though is case after case of this injustice, paying a substandard wage, practiced throughout the world by MNC’s.  Their defense is that they are investing and creating jobs in places that otherwise would be devastated by poverty.

“MNC’s argue that they invest large amounts of capital in developing countries and bring sophisticated technology and management skills there which create jobs, produce goods and services, and increase economic growth.  Critics contend that the MNC’s control capital and technology, introduce inappropriate technology (tractors instead of tillers), manipulate markets and crush cultures through advertising (infant formula instead of breast milk, Coca-Cola instead of fruit juice), and in the end take the profits home.  These critics interpret such MNC operations as neo-colonialism.”(Thompson, 42)

It is this neo-colonialism that Thompson speaks of that can be so devastating to a developing country’s labor force and resources.  “Whatever its national origin, a MNC seeks to maximize its own interests and those of its shareholders, rather than the interests of any country or of the poor.”  (Thompson, 40)  What fuels this neo-colonialism, are cheap resources, slack environmental laws and a work force that is desperate for jobs yet completely vulnerable to the whims and needs of the MNC’s.  As a result of this we see vast exploitation of workers throughout developing countries.  Again, MNC’s will attempt to defend their paying less than a living wage by making the claim that if they weren’t there people wouldn’t be making any wages.  The harsh reality of this is, if they have to raise wages they will leave.  CST speaks very strongly to such beliefs and actions.  “If through necessity or fear of a worse evil, the workman accepts harder conditions because and employer or contractor will give him no better, he is the victim of force and injustice.” (RN, section 34)

Nike as an Example of Raw Capitalism

How does Nike fit the mold of an MNC using or rather exploiting the current global economic situation?  Recall that one of the key elements of raw capitalism is finding the cheapest source of labor.  Companies search the world for social and political climates that are conducive to such practices.   The two most pressing factors that make certain countries attractive to MNC’s are 1) a labor force that is in dire need of work, 2) a labor force that is not allowed to organize and collectively bargain for better conditions and wages.  Historically, based on their actions, Nike is a company that exploits these conditions.

The following, which was written by a Portland middle school student (very encouraging for the future), begins to give us some indication of Nike’s exploitative business practices.

In 1984 the $5.2 billion dollar Nike Corp. closed its last U.S. factory and moved its entire production to cheap labor in Asia.  Some 65,000 Nike U.S. shoe workers lost their jobs because of the move overseas (Putnam, Internet).  Making these sport shoes does benefit developing countries.  It brings money jobs and some skills are shared.  However, Nike’s target is not so.  As Taiwan and South Korea democratized, unions became legal, and wages began to rise, Nike immediately began to look for new undeveloped havens of low wages.  New operations were set up in Indonesia, China, Vietnam, Pakistan, and Thailand.  Nike now has a work force of only 8,000 employees.  The 350,000 people who make their shoes in Asia (Hua, “Nike Protest Charges Abuse of Employees.”) are employed by subcontractors, not Nike. (Glenn, 1)

The above gives a general idea of how Nike operates.  Nike seems to be a classic example of a neo-colonialist company.  “Although MNC’s are not in the development business, their investment of capital, technology, and management skills, which can create jobs and foreign exchange for developing countries, can contribute to economic development.  The question is: whose interests does this private foreign direct investment serve?” (Thompson, 40)  I believe if we look at Nike’s track record we can gain greater perspective on where their interests lie and who their investment is serving.  The following includes parts of the “Nike Chronology” that was compiled by Global Exchange in 1997, which documents Nike’s trend of exploitation and oppression of its worker’s rights.

1970s

Nike shoes are made in Taiwan and South Korea.  When workers organize for better wages, Nike pulls out and begins production in Indonesia, the People’s Republic of China and Vietnam.

July 28, 1992

Indonesian government raises the minimum wage by 500Rp (USD $0.40) from 2,100Rp to 2,600Rp (USD $1.10).  However, the Sung H Dunia factory in Indonesia fails to comply with the new minimum wage regulation by paying workers an increase of only 120 Rupiah (USD $.09) per day.

September 28, 1992

6,500 workers at the Sung Hwa Dunia factory in Indonesia stage a one day strike and demand better wages, facilities and working conditions.  Some of the workers’ demands are met and all workers go back to work on September 30, 1992.

January 1993

24 Indonesian workers are accused of organizing the September 28th strike and all 24 are fired.

1995

Dusty Kidd, Director of Nike’s Labor Practices Department admits (in a press conference in 1997), “probably 80 percent of the Nike contracted factories” applied for and received minimum wage exemptions for the last two years.  Nike paid workers in Indonesia below a minimum wage until April 1997.

Chinese New Year 1997

The Wellco Factory management in China pays workers half their regular wage forcing workers to go on strike until management agrees to pay their full wages.

March 1997

The Assembly Production department at the Wellco factory goes on strike because they were not paid their full wages.  All workers involved are fired.

April 1, 1997

The minimum wage for factories in the Jakarta area of Indonesia rise from $2.25 to $2.46 per day.

April 22, 1997

10,000 workers from the HASI factory in Indonesia go on a four-mile protest march because their paychecks do not reflect the new minimum wage increase.  The management had stripped workers of an attendance bonus to offset the rising minimum wage.  Workers on strike are nervous about the factory’s application for an exemption from the minimum wage.  HASI had, in fact applied for the waiver, along with other Nike producing factories.

April 23, 1997

Nike agrees to pay minimum wage for Indonesian workers.

April 25, 1997

1,300 workers at the Sam Yang factory in Vietnam go on strike to request a one-cent per hour raise in their salaries.  Refusing to submit to threats of termination, the workers remain behind locked gates within the factory grounds.  Other issues include excessive and illegal overtime, compensation for working with hazardous material and emergency medical services for night shift workers.

April 30, 1997

International Confederation of Free Trade Unions denounces Nike operations in Indonesia and Vietnam.

May 7, 1997

1,800 workers at the Sam Yang factory in Vietnam go on strike for the management to sign a collective bargaining agreement with workers.  Less than a week later, Sam Yang management states it intent to fire up to 700 workers involved in the strike.

July 1997

9 workers are in jail, 300 are injured, 97 are terminated from their jobs and cases are issued against 800 workers at the Youngone factory in Bangladesh after the police disrupt a labor demonstration in the Dheli Export Processing Zone.  The factory’s main buyer is Nike.

September 21, 1997

A report by two Hong Kong human rights groups cites “poor conditions” in factories.  It charges that workers – mostly young women, some of them children – from rural provinces in China are forced “to put in excessive amounts of overtime to keep their jobs.”  The report claims Nike violates up to 10 Chinese labor laws with respect to minimum wage, overtime, child labor and more.

November 10, 1997

Dara O’Rourke, an independent consultant with the United Nations performed environmental audits of at least 50 factories in Vietnam.  During his visits, he performed walk-through audits in the factories and interviewed management personnel and interviewed workers confidentially outside the factory (O’Rourke is fluent in Vietnamese).  His evaluation of the Nike Tae Kwang Vina factory revealed low pay (the lowest of all 50 factories audited), health and safety hazards, sexual harassment and violations of numerous Vietnamese labor laws.  O’Rourke was leaked an internal audit performed by Nike’s accounting firm Ernst and Young by a disgruntled Nike employee.  O’Rourke says Ernst and Young mistakenly reports  Nike is in compliance with the Vietnamese minimum wage law of 19 cents per hour.  However this internal document shows Nike pays workers… 20% below Vietnamese minimum wage law.

It seems obvious from this limited listing of facts and events that Nike business practices are exploitative.  They have consistently violated the two most fundamental workers’ rights, 1) the right to a living wage, 2) the right to organize.  In doing such, they have made themselves a perfect example of an MNC that takes advantage of the exploitative nature of raw capitalism.  Also in doing this they have become one of the grossest violators of Catholic Social Teaching.

Nike and the US Bishops’ Economic Justice for All

While I believe Nike’s business practices to be in violation of the spirit of the entire body of CST I felt that it would serve best to focus on one particular letter.  The letter I have chosen is Economic Justice for All, which was written in 1986 by the US Bishops as an analysis of the current economic situation, the injustices that are inherent to it, and possible suggestions for improving the plight of the poor and oppressed.  Since Nike is an American company I felt that this particular document would do well to shed light on the injustices that are occurring within the context of an American based multi-national.  To this end, I will offer commentary on a number of points that are brought up in the letter that I feel are most relevant to this discussion. 

“Our faith calls us to measure this economy, not only by what it produces, but also by how it touches human life and whether it protects or undermines the dignity of the human person.” (Section 1)  I believe this statement is the essence of Nike’s violation of CST.  Their concern, as a multi-national working within a capitalist system, is the bottom line.  They are to minimize costs and maximize profits.  In doing so, as discussed earlier, they commodify labor and “undermine the dignity of the human person.”

The two major issues of concern with regards to Nike’s business practices are their continual failure to pay a living wage and their desire to conduct business in countries where workers are not allowed to organize and collectively bargain for basic human rights.  These human rights “are the minimum conditions for life in a community.  In Catholic Social teaching, human rights include not only civil and political rights but also economic rights.” (Section 17)  Although Nike claims they believe in and fully support the rights of their workers, “We cannot separate what we believe from how we act in the marketplace and the broader community, for this is where we make our primary contribution to the pursuit of economic justice.” (Section 25)

To gain some perspective on the scope of the injustice of Nike’s business practices, it would serve us well to have the following information.  To begin, Nike has made some strides in addressing the allegations that they are violating the rights of their workers in their Asian factories.  On May 12, 1998 Phil Knight, CEO of Nike announced “New Labor Initiatives” which show promise but unfortunately do not adequately address the two areas of greatest concern, wages and the right to organize.  From their report for Community Aid Abroad, “Sweating for Nike,” by Tim O’Connor and Jeff Atkinson we can learn the following about how Nike is addressing these two critical issues.

For a start, the Code and Memorandum make no mention of the right of workers to organize and to bargain collectively – although the company says it “allows independent trade unions in all of its contracted factories” (Bours 1996).  These are the most fundamental of all workers rights, internationally recognized and set down by the International Labor Organization (ILO) in its Conventions Nos 87 and 98.  (The ILO is an international body consisting of representatives from government, business and the union movement, which establishes international standards for workers rights.

The guidelines of the Athletic Footwear Association (AFA) mentioned above call on members to only do business with contractors whose workers are “allowed the right of free association and not exploited in any way.”  Nike’s Code and Memorandum should at the very least be in line with these industry-wide guidelines.

Also needed in the Code and Memorandum is the principle that wage levels should be sufficient to allow workers to meet their basic needs for adequate food, shelter, sanitation, and health care.  All they say is that contractors should comply with local regulations regarding minimum wages.  But, as has been argued above, in most cases this is not enough to fulfill basic needs.  Wage levels should be set by companies not on the basis of government regulation alone, but according to what is needed to allow workers and their families to have adequate diet and housing and to pay for basic necessities such as healthcare.

Along with this I will offer some other quick facts generated by the labor rights watchdog group, Global Exchange.

* Indonesian workers make $2.46 a day.  10,000 Indonesian workers went on strike to protest wages that are below subsistence level.  “If I don’t work overtime, I can’t survive,” says Baltazar at PT Hasi Nike factory in Jakarta.  He works an average of 40 overtime hours a week.

* Vietnamese workers make a $1.60 a day.  1,300 workers at the Sam Yang factory went on strike to demand a one cent per hour raise in wages.  Other issues include excessive and illegal overtime and compensation for working with hazardous materials.

* Chinese workers make a $1.51 a day.  The minimum wage in Dongguan province is $1.93 per day for eight hours of work.  Nike employees get as little as $1.51.  Workers are forced to work from 144-192 overtime hours per month to make ends meet.

To make things worse…

* Philip Knight, CEO of Nike is the sixth richest man in America.  He is worth 5 billion dollars and profits off the backs of sweatshop laborers.

* Nike is the biggest shoe company in the world because it operates in countries where it is illegal to organize and collectively bargain for better wages and working conditions.

* Nike can afford to pay endorsers like Michael Jordan, Tiger Woods and Monica Seles a combined total of over 60 million dollars to brand themselves with the swoosh.

Now, to view these facts in light of CST makes it all the more distressing for those of us who are committed to the social justice implications of the Gospel. By not paying a living wage and conducting business in areas where workers cannot organize, the Nike Corporation specifically violates the following sections of Economic Justice for All and generally violates the spirit of the entire body of Catholic Social teaching.

Section 69

Commutative justice calls for fundamental fairness in all agreements and exchanges between individuals or private social groups.  It demands respect for the equal human dignity of all persons in economic transactions, contracts, or promises.  For example, workers owe their employers diligent work in exchange for their wages.  Employers are obligated to treat their employees as persons, paying them fair wages in exchange for the work done and establishing conditions and patterns of work that are truly human.

Section 73

…Work with adequate pay for all who seek it is the primary means of achieving basic justice.

Section 80

…First among these are the rights to life, food, clothing, shelter, rest, medical care, and basic education.  These are indispensable to the protection of human dignity…  Participation in the life of the community calls for the protection of this same right to employment, as well as the right to healthful working conditions, to wages, and other benefits sufficient to provide individuals and their families with a standard of living in keeping with human dignity, and to the possibility of property ownership.

Section 103

…The way power is distributed in a free market economy frequently gives employers greater bargaining power than employees in the negotiation of labor contracts.  Such unequal power may press workers into a choice between an inadequate wage and no wage at all.  But justice, not charity, demands certain minimum guarantees.  The provision of wages and other benefits sufficient to support a family in dignity is a basic necessity to prevent this exploitation of workers.  The dignity of workers also requires adequate health care, security for old age or disability, unemployment compensation, healthful working conditions, weekly rest, periodic holidays for recreation and leisure, and reasonable security against arbitrary dismissal.  These provisions are all essential if workers are to be treated as persons rather than simply as a “factor of production.”

Section 104

The Church fully supports the right of workers to form unions or other associations to secure their rights to fair wages and working conditions.  This is a specific application of the more general right to associate.  In the words of Pope John Paul II, “The experience of history teaches that organizations of this type are an indispensable element of social life, especially in modern industrialized societies”… No one may deny the right to organize without attacking human dignity itself.

Section 105

Denial of the right to organize has been pursued ruthlessly in many countries beyond our borders.  We vehemently oppose violations of the freedom to associate, wherever they occur, for they are an intolerable act on social solidarity.

Section 111

Large corporations and large financial institutions have considerable power to help shape economic institutions within the United States and throughout the world.  With this power goes responsibility and the need for those who manage it to be held to moral and institutional accountability.

Section 256

In this arena, where fact and ethical challenges intersect, the moral task is to devise rules for the major actors that will move them toward a just international order.  One of the most vexing problems is that of reconciling the transnational corporations’ profit orientation with the common good that they, along with governments and their multilateral agencies, are supposed to serve.

Section 279

…Foreign investors, attracted by low wage rates in less developed countries, should consider both potential loss of jobs in the home country and the potential exploitation of workers in the host country.

Section 280

Although the ability of the corporations to plan, operate, and communicate across national borders without concern for domestic considerations makes it harder for governments to direct their activities toward the common good, the effort should be made; the Christian ethic is incompatible with a primary or exclusive focus on maximization of profit.

With the above sections of CST fresh in mind, it seems quite obvious that Nike is a long way from living up to the standards set by CST.  It is for this reason that I have grave concern with the current relationship between Nike and St. John’s University.  In the section that follows I shall explore this in greater detail.

Nike and their Partnership with St. John’s University

For those of you not familiar with St. John’s University please allow me to share with you an excerpt of the university mission statement.

St. John’s is a Catholic university, founded in 1870 in response to an invitation of the first Bishop of Brooklyn, John Loughlin, to provide the youth of the city with an intellectual and moral education.  WE embrace the Judeo-Christian ideals of respect for the rights and dignity of every person and each individual’s responsibility for the world in which we live.  We commit ourselves to create a climate patterned on the life and teaching of Jesus Christ as embodied in the traditions and practices of the Roman Catholic Church.  Our community which comprises members of many faiths, strives for an openness which is “wholly directed to all that is true, all that deserves respect, all that is honest, pure, admirable, decent, virtuous, or worthy of praise” (Philippians 4:8). Thus, the university is a place where the church reflects upon itself and the world as it engages in dialogue with other religious traditions.

St. John’s is a Vincentian university, inspired by St. Vincent de Paul’s compassion and zeal for service.  We strive to provide excellent education for all people, especially those lacking economic, physical, or social advantages.  Community service programs combine with reflective learning to enlarge the classroom experience.  Wherever possible, we devote our intellectual and physical resources to search out the causes of poverty and social injustice and to encourage solutions which are adaptable, effective, and concrete.  In the Vincentian tradition, we seek to foster a world view and to further efforts toward global harmony and development, by creating an atmosphere in which all may imbibe and embody the spirit of compassionate concern for others so characteristic of Vincent. (Mission Statement of St. John’s University.

It is because of this consistent claim to following the Vincentian ideal that is so committed to searching out the “causes of poverty and social injustice” that makes St. John’s contract with Nike so distressing.  As one can see from the section on Nike and CST above, Nike is most definitely in violation of the social teaching of the Church.  How then can the largest Catholic university in the west allow themselves to be prostituted as a promoting agent by said company?  It would seem that Nike is no more concerned with the mission of the Vincentians than they are with paying a living wage!  How are we at St. John’s allowing ourselves and our mission to be compromised?

I will offer this example for you to ponder.  Let us imagine that Planned Parenthood, one of the largest suppliers of abortions in the United States was to offer St. John’s 3.5 million dollars for their pharmacy school.  I would have to imagine that St. John’s, citing the moral teaching of the Church, would claim that accepting these funds would compromise the integrity of the university.  Another example, perhaps a well-known organized crime family were to offer St. John’s 3.5 million dollars to build a new chapel.  I would hope that again, University officials would feel that entering such a relationship would seriously compromise the integrity of the University and they would decline.  Why then is there this compromise of the Christian ethic when it comes to the Nike Corporation?

I have my own theory as to why the administration is so quick to defend and attempt to vindicate the Nike Corporation.  They want the money!  Also, I am quite sure that the administration is somewhat concerned and embarrassed that this issue was brought to light by a number of graduate and undergraduate students.  Therefore, to save face, they have entered into months long scrambling and avoidance of the issue hoping that Nike will come around or that we, the activists, will go away.  Unfortunately for them neither has occurred.

To be honest I am very troubled and confused as to how the administration can morally justify our relationship with the Nike Corporation.  Perhaps if the following questions were answered I might have a better understanding of their position.

1. Is it morally acceptable for workers to be paid less than a living wage?

2. Is it morally acceptable for workers to be refused to right to organize and collectively bargain for better wages and working conditions?

3. Are both of these basic human rights, the refusal to pay a living wage and not allowing workers to organize violations of the social teaching of the Church?

4. Is it morally acceptable to benefit from a company that violates the rights of its workers and maximizes its profits by doing so?

5. Are we not benefiting from such a situation by being in a relationship with the Nike Corporation?

6. If Nike’s business practices are morally unacceptable is it not our Christian duty to publicly pressure them into change?

7. What are we specifically going to do to try and change Nike?

8. Is it true that there is an anti-defamation clause in our contract, as is standard in all Nike’s contracts with universities, that does not allow coaches or administrators to be publicly critical of Nike?

9. If there is such a clause, does this not limit our academic freedom, our ability to be publicly critical, and an individual’s right to dissent?  And, if Nike’s labor practices are as good as Phil Knight says why is this clause necessary?

I am very interested to know the answers to these questions, as I believe they define

the parameters of the issue at hand.  On a more personal note, I want the answers to these questions, because it was on these that I was forced to make a most difficult decision.

Saying no to Nike, a Matter of Conscience

The decision was to wear Nike and drop the issue, or resign.  I was given this ultimatum in May by one of the athletic administrators.  Ironically, on that same day, May 12, 1998, Phil Knight held his press conference to announce his “New Labor Initiatives.”  At first I was elated by the news.  I believed Nike had come around and my conscience could rest easy knowing our University was in a contract with a company that was committed to justice, specifically to worker’s rights.  Unfortunately as I read though the transcripts of the press conference it became distressingly obvious that Nike had not significantly addressed the issues of wages or the workers’ rights to organize.  Therefore, I decided the issue could not be dropped.  The dialogue must continue.  The University must be publicly pressured to reconcile how we can remain in this contract and stay committed to our mission and the social justice implications of the Gospel.

All of this lay heavy on my conscience.  I was a coach for one of the most successful college soccer programs of the 1990’s.  I truly felt that in the coming year, with the team we had returning, that I would be able to realize the dream as a coach that I did not realize myself as a player; to win an NCAA championship.  Now I was faced with the challenge of putting this dream on the line.

I couldn’t believe that I was being forced to make this decision.  I believed and still do that I was following the true spirit of the mission of university and the Gospel by making this a public issue.  I had no idea what consequences these actions would hold.  I simply could not allow myself to sit back while our Catholic university was benefiting from profits made on the backs of the poor.

Now was the time to decide how committed I was to the cause.  The decision was laid before me.  Show your allegiance to a company that violates the body of CST and the mission of the university or show your allegiance to the pursuit of the social justice implications of the Gospel.  I wish I could say the choice was easy.  Thanks to God, through prayer and reflection the truth pierced through to my heart of hearts and I knew what had to be done.   I resigned.

Works Cited

O’Brien, D.J., and Shannon, T.A., Catholic Social Thought: The Documentary Heritage; Maryknoll, (New York 1997).

Thompson, J. Millburn, Justice and Peace: A Christian Primer; Maryknoll, (New York 1997).

Glenn, T., “Nike’s Cheap Labor,” in Campaign for Labor Rights, www.compugraph.com/clr/alerts/nikey0001.html, March 1998.

Global Exchange, “The Nike Chronology,” in Corporate Accountability, Nike Campaign, www.globalexchange.org/corpacct/nike/chronology.html, March 1998.

O’Connor, T. and Atkinson, J., “Sweating for Nike,” A report on Labor Conditions in the sport shoe industry; Community Aid Abroad Briefing, Paper, No. 16 – November, 1996.

St. John’s University, Mission Statement of St. John’s University, New York; Approved by the Board of Trustees, December of 1991.

My Nike Nightmare - by D. Jayadikarta

July 20th, 2009
My Nike Nightmare
Written by D. Jayadikarta
Edited by Wakidi 

It was May 2000 and I found myself bouncing on a wooden bench masquerading as a passenger’s seat in a public mini-bus in Southern Bandung, West Java, Indonesia. I was on my way to a job interview with Fengtay Enterprises, Ltd., a Taiwanese-based company that proudly manufactured Nike footwear for overseas markets. The sun was perched high, the road was covered with dust, and potholes seemed to be everywhere. The mini-bus passed so many factories along the poor winding road that I did not even have time to read names on the sides of the buildings, they were producing everything here from chocolate to garments to electronics. 

Although the road was designed for vehicles to access the factories in Southern Bandung, it was built with cheap materials – most likely some local official lined their pockets with the money that was to be spent to build a proper thoroughfare – and I stared to get car sick as the mini-bus swerved to avoid the potholes. I was desperate to arrive at my destination and I thought that my long, uncomfortable journey would never come to an end. 

I finally arrived and found myself standing in front of a tall, pale blue, steel gate. The gate was emblazoned with a dark blue globe logo with the initials IW in the center. I later found out that IW was the Nike factory ID for Fengtay and that each factory in Asia had its own two-letter Nike identifier. There was no Nike Swoosh or pictures of Michael Jordan with his $200 basketball sneakers to be found. This was very different from the images I had of Nike, generated by their slick advertising in the Jakarta malls. I thought, “I cannot be in the right place. This doesn’t’ look like a Nike factory, it looks like a prison.” 

I walked towards the security office and asked the guards stationed behind the glass sitting at their desk if this was where I was supposed to be. “Yes, Fengtay Enterprise, Ltd.,” he said with a cold, suspicious look. I was relieved. The last thing I wanted to have to do was get back on that mini-bus and I certainly did not want to be lost in the polluted slum that surrounded the factory complex. 

A few weeks after the job interview, I was officially employed at Fengtay. But there was no feeling of the excitement that one usually gets when one finally lands a new job. Even though I was unemployed for a while, a result of the economic crisis in Indonesia, I just was not elated by my new position, something seemed wrong about it from the beginning. But what choice did I have? Since the crisis, people like me had lost hope of finding work that had real meaning or hope a future. You simply took the best job you could get to avoid poverty and hunger, unless you wanted to live on the street and attempt to survive on instant noodles everyday. 

I was told that Fengtay employed around 9000 people from around the neighborhoods of Bandung and Banjaran. It was such a massive factory complex. I worked in the main office building in the Business Department. Due to the nature of my work, I had to leave the office more often than my co-workers and tour the factory floor where those famous Nike shoes are born. On my first walk through the plant, I was completely shocked to hear factory managers (you know them by the pink identity badges hanging from their shirt pockets) swearing at workers as if they were dogs. As if this were not bad enough, I saw women workers, late in their pregnancies, pushing massive cartloads of materials for making shoe uppers. I had never seen anything like this. Is this what all the factories were like in my country? 

That night, back in my room at the boarding house, I could not sleep at all. I was haunted by the images of those young, female factory workers – most of them high school graduates in their late teens and early twenties - being verbally abused by the managers. I felt that I was trapped in a labyrinth of poverty and exploitation. Suddenly, the dream of making Nike’s world-famous sneakers became a nightmare. This nightmare would play itself out day after day, and I would not awaken from it until the day that I quit working at Fengtay. 

The abuse was not limited to the factory floor, but could be found in the management offices as well. The Taiwanese bosses felt they had license to mistreat the employees whenever and wherever they pleased. Both the male and female bosses, had one thing in mind – meet the production target – and they did whatever the felt they needed to do to make this happen. If the target was not reached, they may get a low ranking from Nike (which could cost them future orders) and they would not let this happen. Through this single-minded focus on meeting targets, these women and men lost their sense of humanity. They became machines, slaves to Nike’s production quotas. The young women on the factory floor paid the harshest price and were abused regularly. It did not matter if it was your first day or your five hundredth day – you were to work, fast, like you have never worked before. 

Everything had to be done to perfection to meet the target and Nike’s quality standards. If the managers feared this was not happening, workers were yelled at, they were called “dogs” and “goats.” At times the screaming of the managers rivaled the screaming of the machines on the production lines. Their mouths spewed filthy words, their weapons to motivate workers, to boost production on the lines to meet the export date targets. Targets – that was what it was all about. 

The factory reluctantly supplied lunch to the workers. When I first saw what was served, I doubted that what was wrapped in the brown, plastic-coated paper could qualify for human consumption. Once I opened it, I felt pity and shame. The food was complete rubbish; low quality rice, stinky, tiny salty-fish, and chunks of a mystery vegetable. This menu for workers was repeated over and over again. 

Not far from the giant lunch shed where workers ate was a nice, clean, modern building where the Taiwanese bosses dined. Their meals were of the highest quality. They also had modern accommodations on-site and even a little golf course to entertain themselves when they were stuck at the factory for the weekend. 

These Taiwanese managers were so arrogant and dictatorial. They ran they factory like a totalitarian regime. You couldn’t even expect a smile from them, because to them, you were less than human. To them, you were “labor,” another line item on the balance sheet, a commodity to be bought and used at the cheapest price possible. 

The Taiwanese all held the highest and most influential positions in each of the divisions at the plant and they walked around the factory complex like spies, keeping tabs on all the workers’ activities. If they found something that they didn’t meet their standards, they felt they could do anything they wanted to rectify it. If you were lucky, they only scolded and yelled at you in a “special meeting” with the Chinese-Indonesian interpreters. If it was your unlucky day, you were demoted to the lowest rank on the production line. 

When I think of my time at Fengtay, I liken it to having your body covered with a rash. It itches and burns each day and you feel the discomfort, mentally and physically, but it does not kill you and you press on. Yes, my Nike nightmare brought me to the darkest point in my life. I no longer knew what it meant to be a human being, running freely and enjoying life, like Michael Jordan or any of the countless others at Nike that make their millions off our sweat and broken dreams. 

I came to Fengtay to be a part of the Nike dream, to share in their success, and hopefully to help my nation move out of the economic crisis. But instead, I spun my wheels on the Nike treadmill and generated wealth for everyone – the Taiwanese managers, the Nike executives, the Nike athletes, the Nike shareholders – but my fellow countrymen and women. In the end, I was no better than when I started. 

Then, some questions started popping into my head. How did these Taiwanese bosses get like this? Was their behavior the result of the pressure they were under from Nike to meet the production targets? Why were these things happening my country? Why had we Indonesians ended up being slaves in our own land to foreign interests? 

One day I went to one of the fancy malls in central Jakarta. I stood there, outside the Plaza Indonesia, looking up at a giant Nike ad, the Nike Swoosh painted on a massive glass window display, and I started to cry. I could not get the workers out of my mind. And then I saw the prices being charged for the Nike shoes that were made at factories like Fengtay. I had to pause and take a deep breath to avoid being overcome with even more emotion. There were the Air Walks, the Air Macs, the Air Rifts, the Baby Jordans, the Jordans, and all the other latest models. Why were the shoes so expensive, priced at a level that only those in the highest class could afford? I knew what they cost to make and what workers were paid. It just was not fair. 

The workers know that their jobs at the factory will not make them millionaires, but they do want fair salaries and a future for themselves and their children. Is that too much to ask from Nike? Perhaps if the Nike executives walked in their shoes for a while, perhaps if the Nike executives lived in the workers’ hovels in the villages, perhaps if the Nike executives felt the workers’ sweat poured out on the factory floor each day, then maybe they would understand. If they understood, then perhaps these Nike executives would show workers the respect they deserve and they would treat them with honor and dignity in their homeland. 

Fear and hope for Nike’s workers in Vietnam

July 3rd, 2009

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Team Sweat:

Team Sweat member, Jeff Ballinger, just passed along the report, WHEN NIKE MEANS STRIKE. The report was published on July 2, 2009 by the Danish Consumer Council. Some of the highlights from the report include:

* 20,000 factory workers at a major Nike contractor in Vietnam went on strike in March 2008 for liveable wages.
* 100 group leaders were fired.
* Zero workers were spoken to by Nike, which claims no workers were fired.
* Six months of intense police surveillance, monitoring and harassment followed.
* Zero free trade unions: despite Nike’s code of conduct promising to protect workers’ rights, the factory unions in Vietnam are still state-run.
* €1 a week extra is the bonus for working with hazardous shoe glue, reveals the Danish Consumer Council in secret conversations with Nike factory workers.

Check the full report out HERE.

Peace, Jim Keady

Does buying stuff made in sweatshops = moral disengagement?

March 7th, 2009

Team Sweat:

I think you might find the paper below interesting. It explores how people morally disengage themselves when buying stuff that is made in sweatshops.

Peace, Jim Keady

Sweatshop Labor is Wrong Unless the Jeans are Cute: Motivated Moral Disengagement

Published: January 27, 2009
Paper Released: January 2009
Authors: Neeru Paharia and Rohit Deshpandé

Executive Summary:

Most consumers in America have purchased products made with sweatshop labor at one point or another. However, very little attention has been focused on the psychological mechanisms that enable consumers to propagate a system that implicates harm. Although many people say they care about ethical issues such as humane labor conditions, demand for products that guarantee it remains low. According to some estimates, there are hundreds of thousands of sweatshops still operating today. HBS doctoral student Neeru Paharia and professor Rohit Deshpandé examine whether people may be motivated to morally disengage in the presence of harmful attributes such as sweatshop labor when desire for a product is high. They found that research participants were significantly more likely to agree with statements such as: “The use of sweatshop labor is okay because companies must remain competitive,” and “Sweatshops are the only realistic source of income for workers in poorer countries,” when confronted with a hypothetical pair of shoes with a higher appeal, versus shoes with a lower appeal. The researchers also found that moral disengagement can drive people to like products they believe to be made with sweatshop labor even more. The authors suggest that since we are confronted with conflicts between our desires and our moral standards on nearly a daily basis, this research calls into question the foundation from which our moral judgments rest on. If our moral judgments are likely to vary based on our affective desires, any moral standards we may hold ourselves to are dubious at best. Key concepts include:

Two studies demonstrate that levels of moral disengagement can be motivated by one’s level of desire for a product made with sweatshop labor.

While past work has studied moral disengagement in the context of war, this work demonstrates how moral disengagement can be used to deal with dissonance that arises from everyday consumption.

Since we are confronted with conflicts between our desires and our moral standards on nearly a daily basis, we must carefully consider how our desires drive us to justify harmful behavior.

If people were not able to reduce this dissonance, they might actually demand that their products be produced free of harm.

About Faculty in this Article:

Rohit Deshpandé is the Sebastian S. Kresge Professor of Marketing at Harvard Business School.

Abstract

While many consumers say they care about issues such as sweatshop labor, the existence of a very small market for ethically-produced products does not reflect this sentiment. One explanation for this discrepancy is that consumers are motivated to use moral disengagement strategies to reduce dissonance when their desire for a product conflicts with their moral standards. In two studies we show levels of moral disengagement can vary based on one’s desire for a product when sweatshop labor is present. Furthermore, we present evidence for a mediated moderation where beliefs about sweatshop labor use moderates the impact of desirability on purchase intention, and moral disengagement mediates this process. Thus, moral disengagement can drive people to like products they believe to be made with sweatshop labor even more. Desire-driven moral disengagement is relevant in moral psychology, and may broadly contribute towards the tolerance of harm in our social and economic systems.

Paper Information

Full Working Paper Text can be found at: http://hbswk.hbs.edu/item/6102.html

Working Paper Publication Date: January 2009

HBS Working Paper Number: 09-079

Reports

January 1st, 2008

Does Monitoring Improve Labor Standards.pdf

Monitoring the Monitors.pdf

Offside Labor Rights and Sportswear Production in Asia.pdf

Sector Wide Solutions for the Sports Shoe and Apparel Industry in Indonesia.pdf

Still Waiting for Nike to Do It.pdf

We Are Not Machines.pdf

When Nike Means Strike.pdf 

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