Nike Is Leading the Race ... to the Bottom

For years, Nike has insisted that it cares about worker rights and is improving working conditions at its overseas factories. Now the company is abandoning one of the only factories in its supply chain that respects the rights of workers

Embarrassed in the 1990s by exposés of the deplorable conditions in its factories around the world, Nike made a public promise to clean up its act. Nike pledged that its supplier factories would respect the rights of workers, including the right to organize a union.

There has been a huge gap between Nike's words and the company's actions. Despite the company's pledges, conditions remain poor throughout Nike's global supply chain and unions are scarce. For most workers, Nike factories today look pretty much like Nike factories ten years ago.

But a few factories have made real progress. Workers at these factories have taken Nike at its word and demanded that factory management follow the standards in Nike's code of conduct. And under pressure from labor rights groups, the factories have responded and ended their sweatshop practices.

One of these factories is BJ&B in the Dominican Republic. At BJ&B, workers sewing Nike baseball caps used to suffer the abuses typical of Nike's contract factories: degrading insults from supervisors, long hours of forced overtime. Anyone who spoke out and demanded better conditions was fired.

Citing Nike's own code of conduct, workers and activists demanded that Nike take responsibility for conditions at BJ&B. Nike, looking for opportunities to rid itself of its sweatshop reputation, said it agreed: Conditions should be improved and Nike would force the factory to clean up its act.

The result was dramatic improvement in standards for workers at BJ&B. Among other gains, workers were able to form a union to defend their rights -- one of the only unions in any Nike factory anywhere in the world. And workers negotiated a groundbreaking union contract that called for an increase over the poverty-level wages that are the industry standard.

Such victories in the global garment industry have been few and far between. BJ&B is one of only two factories in all of Latin America where activists have succeeded in forcing Nike to make real, lasting improvements in working conditions.

BJ&B is hugely significant in the debate of working conditions in the global economy. BJ&B demonstrates that it is possible for U.S. multinational corporations to ensure ethical behavior on the part of their overseas contract factories -- when they are willing to take the necessary steps. And BJ&B has meant dignity in the workplace and a better life for thousands of people -- workers and their families -- in the Dominican Republic.

Nike was happy to take credit for the progress at BJ&B. Nike has touted BJ&B as proof of its commitment to cleaning up working conditions -- proof that Nike and sweatshops were no longer synonymous.

Last week, Nike demonstrated the sincerity of its commitment to worker rights -- by announcing the closure of BJ&B. Nike says the factory isn't "competitive" and announced that it will move cap production to Bangladesh and Vietnam, two countries where working conditions are bad, unions are illegal, and caps are a few pennies cheaper than at BJ&B. Factory management suspended the entire workforce and set a closure date of May 22.

It's hard to imagine a clearer demonstration of the hypocrisy and emptiness of Nike's extensive "corporate social responsibility" programs. When the spotlight was on BJ&B, Nike was forced to act responsibly, but as soon as Nike executives thought no one was looking, they decided to dump one of their only decent factories -- because the product can be made more cheaply in a sweatshop.

How highly does Nike value the rights of workers? The savings the company will derive from abandoning BJ&B are less than one one-thousandth of the company's annual advertising budget.