As a company, Oregon-based Nike has previously said that the average factory worker in the 13 countries it has contracts with is paid twice the amount of the local minimum wage.
Past reporting from ProPublica found that less than 1% of Cambodian workers made that. Now, a new story from the publication, in partnership with The Oregonian/OregonLive, found that workers in Indonesia also do not reach that standard. On top of that, the reporting found that Nike is also shifting much of its manufacturing to parts of the country that are less-developed and where workers make much less.
Rob Davis is a reporter covering the Northwest for ProPublica. Matt Kish is the business reporter for The Oregonian. They join us to share more on what their reporting revealed.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: From the Gert Boyle Studio at OPB, this is Think Out Loud. I’m Dave Miller. For decades, Nike has said that, on average, the people who manufacture their shoes and apparel around the world make twice the local minimum wages. But recent reporting has found that that’s not the case in some of the countries with the highest percentage of the Oregon-based company’s workers. Other recent reporting has found that within Indonesia, Nike is shifting its production from places where workers earn a living wage to places where they will earn a lot less.
Meanwhile, domestically, the company is dealing with an ongoing civil lawsuit alleging discrimination against female employees and a federal investigation alleging discrimination against white employees. So there’s a lot to get into, but we’ve got two reporters to help us sort through all of it. Rob Davis covers the northwest for ProPublica. Matt Kish is The Oregonian’s business reporter. They both join me now. It’s great to have both of you back on the show.
Rob Davis: Hey, thanks for having us.
Matt Kish: Thanks for having us.
Miller: Rob, I want to start with you. Going back to the 1990s, Nike has said that it pays its average factory workers about twice a local minimum wage, and the company has reasserted that since 2021. What did you find when you looked into that claim?
Davis: This was one of the claims that came out of the sweatshop scandal in the ‘90s. So if you go back then, Nike was under assault for moving down the wage ladder through Asia from Japan and Korea, where its manufacturing had been, into Indonesia, into Vietnam when it opened for business, into Cambodia.
Miller: They weren’t just accused of that. Didn’t they say that this is what they were doing?
Davis: That is what they were doing. Folks making pennies per hour. Phil Knight had this mea culpa wherein he acknowledged Nike’s brand had become synonymous with slave wages, forced overtime and arbitrary abuse. But coming out of that moment, there was no real commitment about what wages were going to be paid. So I wanted to know where are factory workers are on wages today? And when you go to Nike’s website, it says, “we’re paying almost double the minimum wage across our supply chain,” which suggests that these folks are fairly well paid.
We started, painstakingly, getting pay stubs one by one by one from factories around the world. And the first real breakthrough that we had was an entire month’s pay ledger at one factory in Phnom Penh, that had employed 3,720 workers making Nike stuff. And 1% of them were making double the minimum wage. So we went to Phnom Penh, talked to those workers about the challenge of a job that was paying, for them, $204 a month, leaving their refrigerators, basically, empty.
Miller: What did you find, more broadly, when you look at the claim in Vietnam and in Indonesia?
Davis: Vietnam is tough because it’s a communist government and labor unions do not really exist there. They exist sort of in name only. So there’s not a lot of transparency on wages in Vietnam, that we can see externally. In Indonesia, Matt can talk about this. He traveled there.
Kish: Yeah, I went to Indonesia last year. I spoke with about 100 factory workers and I asked them very basic questions. How much do you get paid? Is it enough to pay all your bills? What would you be doing if you didn’t work at the factory? So, Indonesia, again, is kind of the root of the sweatshop scandal of the ‘90s. Nike employs about 280,000 factory workers there. It has 62 contract factories in the country. It is Nike’s second biggest country for footwear manufacturing.
The workers I talked to there said they made minimum wage or a little bit more. Minimum wage places where Nike has factories in Indonesia, [they earned] anywhere from $150 a month to $300 a month. In one group interview with about 30 workers, there was laughter when I asked if that’s enough money to pay your bills. I got estimates as high as 70% from workers, about how many people have second jobs. Those second jobs can be fish farming, collecting scrap metal, working in a roadside kiosk. So they are definitely not well paid.
Miller: In a statement about your reporting, Nike wrote, “a company trying to mislead would not voluntarily publish wage data, openly acknowledge its journey toward improvement or subject itself to third party scrutiny.” How transparent would you say Nike has been?
Davis: Nike, in some ways, pioneered this type of disclosure. In 2001, it published the average wages that it pays on a country-by-country level. It was coming out of the sweatshop scandal. It was the first company to say where its factories were and how many people were working there. What it is doing now, though, is disclosing less than some of its competitors. So you get that they’re paying 1.9 times the minimum wage across a workforce. That, globally, is 1.1 million people making Nike stuff.
Miller: Just because they’re not technically Nike employees, right?
Davis: Correct.
Miller: These are contract factories. Nike has a contract with the factory. The factory employs these people, so many of them. I mean, over a million people making Nike products worldwide.
Davis: Every single day. It is the largest athletic apparel manufacturer in the world. So there are a lot of folks going to work making Nike products.
One of the things that we heard from advocates is that pay disclosure and pay transparency matters. If you are advocating for more pay, if you are a union advocating for more pay, if you have some benchmark and you can see, well, “we make this at this factory, but this is what the average is in our country,” then you have a baseline for those negotiations. Nike is saying, across the entirety of its workforce, folks are making 1.9 times.
Miller: And your data analysis, to the best of your ability – actually with a lot of data you crunched – says that mathematically that just does not seem possible?
Davis: That’s a global average. So it’s possible that there are places in its supply chain that are counterbalancing the folks who are making minimum wage in Cambodia and Indonesia.
Miller: Matt, I was struck by another thing that you heard from the company and this is from Sandra Cho who oversees human rights for Nike. She said that it’s a mistake to focus solely on pay relative to minimum wage. It’s worth saying again that one of the reasons that you both did that is because of the company’s own claims. But even setting that aside, she says the company focuses on whether or not wages are high enough to cover basic expenses and a little bit more. That’s a working definition of a living wage.
So for your recent reporting, that’s really what you ended up focusing on. As I understand it, more about what this actually means for people who are making shoes and apparel, as opposed to, solely, how does it compare to the prevailing minimum wage. So what did you find when you looked at that?
Kish: Nike has two key metrics when it comes to wages. The first is the minimum wage, and that’s 1.9 times the minimum wage assertion. The second is whether workers make a living wage. So this is whether or not people make enough money to pay their basic living expenses. So Nike’s data suggests that 66% of workers, and its biggest suppliers, do make a living wage. And that’s up from 53% a couple years ago.
Rob and I tested that by looking at Nike’s expansion into Central Java. So if you’re not oriented to Indonesia, the major metropolitan area of Jakarta has the highest minimum wages in the country, around $300 a month. And that’s historically where Nike has sourced its products in the country. But in recent years, it has moved manufacturing capabilities into Central Java, where wages are closer to $165 a month. And Rob took a deep look at this, over a 10-year period.
Miller: Rob, is it fair to say that this is basically a kind of in-country version of the production shifts that we saw in previous decades? So from Japan to Korea, to Taiwan, eventually to Indonesia and Vietnam, and now within Indonesia; each time finding workers who could be paid less. And now it seems that they’re simply doing the same thing except within a country?
Davis: Exactly. To orient your listener, it’s sort of the difference between opening your factory in Portland or in Baker City. We’re talking about moving a few hundred miles. But by doing that, you’re cutting your wages. With Nick McMillan, a computational journalist on our staff, we looked at Indonesia [which] has these vast differences in minimum wages across the country. So you can move 200 miles and instead of paying around $300, you’re paying around $150 to $160 to a worker.
Miller: But does the money go a lot further? Does it make it so even if Nike’s paying a lot less, they could still credibly argue that they are paying something close to a livable wage?
Davis: That is a great point. This is not just about moving to pay a lower wage. This is about a move that is directly undermining what the company is saying its goal is, on paying workers a living wage.
Miller: In what way?
Davis: The cost of living in West Java and Central Java, where Nike has moved tens of thousands of jobs or expanded and grown with tens of thousands of workers. The cost of living there is not so much lower. So you have a drop of about 36,000 workers in places where the minimum wage is at, or roughly around, a living wage according to external benchmarks. And a growth of 112,000 workers, where the minimum wage is not considered a living wage.
Miller: Matt, how might worker protections differ between the newer, less industrialized parts of Indonesia, compared to longtime industrial hubs closer to Jakarta?
Kish: The concern about the move into Central Java, for labor activists, is that it is a younger workforce. The unions there are less developed, less sophisticated and there’s less scrutiny, especially when compared to more established manufacturing hubs where Nike has sourced products, including Jakarta. So Scott Nova, Executive Director of the Worker Rights Consortium, a major labor group, told me that gender-based violence and other abuses are more prevalent in Central Java. Nike, for its part, does audit its factories annually. It has said that it has not found more problems at its suppliers in Central Java than in other places in Indonesia.
Miller: I was struck by some of the language the company used in its comments to you. They talk about growth, progress and investing in ways that expand opportunities for developing countries. The basic narrative seems to be, we’re a force for economic good and we’ve made a significant improvement in the lives of people in the countries where we have operated. And we’re one of the big forces for economic development, for enriching and industrializing countries.
I’m sort of paraphrasing, but I don’t think in unfair ways. What do you think about that framing?
Davis: I think that you can not pay a living wage, but pay a market-based wage and somebody is going to take it, when the alternative is … I talked to workers in Cambodia who said, “gosh, factory work is easier than carrying 50-pound bags of rice out of the rice fields.” This is easy, it’s low skill, easier labor, comparatively, for some people. When I talked to workers in Cambodia, I said, “if you could say something to Nike about your factory closing, what would you say?” And they say, “can they reopen it?”
Miller: As Oregonians, I think a lot of us have a special interest in Nike’s actions. But as consumers in a global market, I am curious how Nike compares to its competitors, to the rest of shoe and apparel manufacturers. I mean, do you have a sense for how they compare to Adidas, Puma and everybody else?
Davis: On making clear promises around a living wage, there are very few of those in any kind of apparel manufacturing. On transparency, Nike has at times been a leader. But I don’t think that you can say that anymore.
Miller: Matt, after visiting these factories, talking to workers at them and just seeing the conditions, hearing about it, has that affected the way you think about your own decisions as a consumer? I’m thinking not solely about Nike. Few of us have been to these factories, but all of us are implicated in global supply chains, whether we think about it or not. I’m curious how it’s affected you as a consumer?
Kish: As a journalist, I remain committed to just being fair and as empathetic as I can about any company I write about, any people I talk to as sources. I would say when I was in Indonesia last year, I spoke with about 100 workers again, and some of them had worked in factories that made products for New Balance and Adidas. And they did not describe any material differences between making Adidas footwear or making Nike footwear.
Miller: Matt, I want to turn to some very different reporting that you’ve been doing about Nike. There’s a lot to cover. Almost eight years ago, former Nike employees filed a suit describing the company as a place where “women are devalued and demeaned, and systematically underpaid or passed over for promotions.” You had an article about that suit just today. Where does it stand right now?
Kish: More than seven years later, it is finally on the verge of trial. So attorneys for plaintiffs and for Nike last week filed a 22-page trial statement that outlines the key legal questions that still need answered before that trial, which is scheduled to begin on July 13. As you might imagine, Nike wants the most limited case presented to the jury. They will likely argue for a smaller number of witnesses. Plaintiffs attorneys are going to want to present the most expansive case they can, with as many witnesses and documents as they can get into the courtroom.
Miller: Into the courtroom. What’s the likelihood that this actually makes it into the courtroom?
Kish: I spoke with one law professor who called this kind of the standard turf battle that happens before a civil trial. So the sides are jockeying to present the best case that they can. He cited a study that says 1% of federal civil lawsuits get resolved at trial.
Miller: So 99% have some kind of settlement?
Kish: Or get dismissed by the judge. So statistically, it’s unlikely that there will be a trial, although that’s the current trajectory.
Miller: OK, so that’s a civil lawsuit at the federal level. Meanwhile, the company is also responding to an investigation brought by the U.S. Equal Employment Opportunity Commission (EEOC). What is this federal agency alleging?
Kish: Under President Donald Trump, the federal government has taken action against universities and nonprofits for their Diversity, Equity and Inclusion programs. So this is extending that to the business sector. Specifically, the EEOC wants to know if Nike engaged in a pattern of disparate treatment against white workers. For instance, they want to know whether white employees were unfairly included in mass layoffs in 2020 and 2024.
As part of that investigation, which started in May of 2024, the EEOC has asked Nike for documents. Nike has been providing documents. This all burst into the public view last month, though, when the EEOC went to federal court and asked a judge to enforce a subpoena for Nike to turn over more information. Nike seemed a little taken aback by the sudden court filing. They called it a surprising and unusual escalation. The company is obviously known for its commitment to diversity programs and it said it’s had good faith participation with the EEOC.
Miller: The Trump administration, as you noted, has gone after universities for their DEI work. They’ve struck all kinds of language and policies from federal agencies. But is there precedent for successful legal challenges against corporations for these kinds of diversity, equity and inclusion efforts?
Kish: I asked one legal expert for a quick take on the filings and just some quick analysis. And what he pointed out was that the vast majority of American companies have carefully vetted their DEI programs to make sure they meet constitutional standards. So he, at least, did not think this would amount to much. But we’ll see.
Miller: Matt and Rob, thanks very much.
Kish: Thank you.
Davis: Hey, thank you.
Miller: Matthew Kish is a business reporter for The Oregonian. Rob Davis is an investigative reporter at ProPublica.
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