Group 3

Catherine Etheridge

Scott Boze

Galahad Clark

Adam Smart


Table of Contents

I. Education Statement

II. Pro/Con Statement

III. Activism Plan

IV. Using the Nike Context to Reexamine America

V. Letter to Phil Knight

VI. Relevant Background Articles


The most important factor when considering whether or not to take a stand on issues, such as those surrounding Nike, is the amount of education available on the subject. Why is education even more important than action? Edu cation of the central issues surrounding a problem lends more credibility to the actions of those who take a stand or participate in activism for a cause. In the case of Nike, education is extremely important. There is a great deal of anecdotal evidence and uninformed opinion circulating about the issues surrounding the Nike situation. Without proper education it is nearly impossible to begin to sort through this mire of information and get to the real issues of the case. Furthermore, if one seeks to take a role of activism, what kind of response will be received from proponents of the situation if they are merely lambasted with uninformed arguments and hearsay? Those responsible will not begin to respond credibly until those who question them do so in a credible manner. Finally as one examines the Nike case, the more information is gained, the more the complexities and subtleties of the issues emerge. With a case as complex as the Nike example, it is imperative to strive to educate oneself on the many facets of the issue in order that, if taking an activist role, the person can lead a more effective role as an activist.


As students prepare to take a stance on the issues surrounding Nike, its production practices, and its business dealings it is important to analyze both sides of the story. Even the most staunch opponent of Nike must admi t that there are some things that Nike is doing right. Conversely, those who side with Nike no doubt can see that there are ways in which Nike can improve its practices.

What is Nike doing right? Nike has a code of conduct that it holds all of its sub-contractors to. This code outlines the expectations that Nike feels all sub-contractors need to follow in order to do business with Nike. This code of conduct has been handed out on wallet size cards in eleven languages to those who work in these sub-contractor factories. Nike has canceled contracts with a few of its sub-contractors who have failed to comply with the code of conduct. In addition, Nike has levied fines against several sub-contractors who have committed abuses or egregious violations of the code.

Nike has made attempts to improve the work conditions in its factories through the removal of ptolulene in the shoemaking process and a reduction in the maximum number of overtime hours allowed for workers. Nike has also begun training some of the managers in these factories in order to ease some of the problems. Nike itself authorized several audits of its production practices in order to assess the job it is doing. Nike sub-contracted factories pay at least the local country’s minimum wage or more to its workers. Several of its factories provide subsidized housing in the form of dorms to its workers. Meals are also provided at a subsidized cost to the workers in Nike sub-contracted factories. In a few instances Nike sub-contractor factories have microcredit establishments in house to help the workers in those factories. These Nike factories are potential jumping-off points to education or better jobs for some of the workers in these factories.

In Nike’s business relationships with universities there are several benefits to these relationships. The school gets top notch equipment for its athletic teams. This is especially important for the non-revenue teams which could not support thems elves without such a situation. In addition, the institution receives some monetary assistance, resulting in the use of less institutional money for coaches contracts, but still retaining high caliber coaches. This money can also go to other outlets in the university, such as in the example of the Chancellor’s Fund at UNC-CH. Nike is doing many things right and conducting itself in what seems to be a laudable manner.

What are the problems with Nike? The workers at the Nike sub-contracted factories are often unaware of the code of conduct and what it means to them. The code of conduct is not specific enough on the practices that sub-contractors must follow. W hen sub-contractors do violate the code of conduct Nike could make the fines and penalties stiffer.

Nike could take more responsibility for the working conditions in its sub-contractor factories. Nike could also use its leverage more effectively to influence the sub-contractors. Nike could also examine the communication between the managers and workers at their factories and work to improve it. This problem and others could be alleviated if Nike located more of its own employees in the region.

Even though Nike pays at least the local country’s minimum wage, this wage is not enough for any kind of life. The workers also need a more secure and efficient way of voicing their complaints in the factory, without the fear of retribution. Inde pendent monitors could be considered to help the workers and to more effectively analyze the problems in these factories. These independent monitors may be necessary because of the questioned validity of the audits already conducted of the Nike sub-contr actor factories.

On the subject of the university, Nike’s intrusion into the life of the institution compromises the integrity of the university. The contracts that Nike has with universities attempt to intrude into the running of these institutions. By paying th e coaches at these universities Nike endangers the loyalties of these coaches. Finally as a general issue, many consumers have a problem with the fact that Nike puts a price tag on their shoes so high the retailers often sell them for $120 or more. Thou gh Nike is doing many things right, there are numerous areas that Nike could address and/or continue to improve.

Course of Action for Students Opposed to Nike

• Organize a groups of students by posting your cause on email listservs, flyers around campus, and/or ads in the student paper.

• Contribute articles and editorials to local papers explaining the issues concerning labor rights and university involvement through the Nike contract.

• Distribute Anti-Nike flyers around campus.

• Network with other activists of labor rights and Nike-awareness. These groups may be from other campuses or national activists such as Press for Change, Global Exchange, Vietnam Labor Watch, and Campaign for Labor Rights.

• Meet and discuss the group's concerns with university officials. These may include the Chancellor, Athletic Director, and coaches.

• Organize debates between supporters of Nike group members. These debates may be for campus crowds, on a university radio, etc.

• Organize demonstrations on campus and in the community.

• Meet and discuss the group's concerns with Nike representatives that visit the campus.

• Refuse to buy Nike products as a demonstration.

• Stage sit-ins in the office of the Athletic Director, etc. to attract more publicity to the issue.

• Begin a letter campaign to Phil Knight.

• Circulate petitions on campus to express students negative views on Nike's labor practices as well as the university's lack of a stand on the issue.

• Begin an email campaign to Nike.

• Put anti-Nike ads in the school newspaper.

• Design anti-Mike apparel to distribute on campus.

• Carry anti-Nike posters to games and other campus events where there is Nike propaganda (such as the Go Heels posters distributed at basketball games).




Course of Action for Students in Support of Nike

• Respond to demonstrations, articles, debates, etc. that are done by the anti-Nike group. The main purpose of the support group is to respond to negative arguments that are presented.

• Distribute flyers around campus supporting Nike.

• Contribute letters to the editor of the campus paper expressing the benefits to the university because of Nike and why that relationship is a positive one. For example, one of the most positive aspects on the UNC campus is the money and equipment th at is being supplied to the non-revenue sports.

• Work with the Nike representative on campus to get students involved in Nike sponsored events such as intramural sports.

• Participate in "good deeds" sponsored by Nike such as collecting old shoes to resurface tracks.

Student Activism at UNC-CH


Looking at the student activist groups on the campus of UNC-Chapel Hill, one would conclude that the groups have been effective at raising awareness of labor issues as they relate to Nike. The Nike Awareness Campaign has actively sought to educate students through debates and public demonstrations. The group has also played a tremendous role in working with university officials to make certain that the negatives of the Nike contract are known and understood. By networking with activists f rom other campuses and national organizations, the group has established credibility and has expanded its realm of influence. Representatives of the group are currently serving on the panel to decide on the collegiate licensing stance that the university should support. What started as an email message to a few listservs to organize students interested in the Nike case has culminated in a group of activists that are working diligently for positive change in university and labor practices.


The Support the Swoosh Campaign has had a much quieter and subtler impact. Predominately, the groups purpose is to react to the actions of the Nike Awareness Campaign and to show Nike that they are students on campus that support Nike. There is a gre at deal of room for this group to become more involved in the priorities of the university and the community as they relate to the Nike contract.


Using the Nike Context to Reexamine America



The USA is the place where immigrants who are willing to work hard can expect to find well paying jobs and maybe even strike it rich. Periodically, however ­ the 1920s and again in the 1990s ­ politicians have lashed out against imm igrants, claiming that too many immigrants move to the US and take jobs away from American born workers. The reality has always been quite different. Rather than competing for employment, the vast majority of immigrant workers have always been forced into the dirtiest, lowest paying jobs ­ from backbreaking work in farm fields to toiling in inhuman conditions in garment sweatshops. And the situation for most immigrants has worsened significantly over the last two decades, as wages for all US worke rs have fallen. For example, farm workers, who are mostly Mexican immigrants, have seen their wages fall by 25 percent over the last two decades, even before adjusting for inflation. Many farm workers now earn only $8,000 per year ­ a drop from $9 ,000 just a few years ago. And

recently released government statistics show that sweatshops have once again become the norm in the garment industry, employing at least 1 million immigrant workers in the USA.The government estimates that more than half of the 22,000 sewing businesses

in the US pay workers below the legal minimum wage and violate overtime laws, forcing workers to work 60 hours per week or more without overtime pay. More often than not, garment employers offer no health coverage and no vacation or sick pay. The Washi ngton Post described working conditions at one New York sweatshop, which sews garments for Wal-Mart and KMart: 'The workers typically

toiled at their sewing machines for up to 60 hours a week in a room with wires hanging from the ceiling, three small fans that served as the only source of ventilation and no fire exits. Wages were arbitrarily cut or delayed if the owner ran short of f unds. Employees who missed a day would be illegally "fined" $30, on top of losing a day's pay. 'Furthermore, the article reported, bosses think nothing of hitting workers or pulling their hair. At a different sweatshop, a worker describe d how the owner's wife struck a worker in the back for sewing buttons incorrectly. Another worker was reportedly fired for

yawning on the job.

The extreme degradation suffered by garment workers first came to light in 1995, when immigration officials raided a sweatshop in Los Angeles, only to find 68 Thai immigrants living in virtual slavery. Locked in and surrounded by a razor-topped fen ce, the workers were forced to work six days a week for 17 hours

a day, at wages as low as 70 cents per hour. After they were discovered, the US Immigration and Naturalization Service removed the workers in shackles, imprisoned them long enough to testify in a hearing, and then deported them back to Thailand.

Last summer a 29-year-old garment worker named Nancy Penaloza came forward and testified about the working conditions she had experienced over a nine-year period in New York. She said she had regularly worked for 66 hours per week in filthy conditi ons, with 'big rats and mice' constantly crawling on her feet in a

sweatshop with one toilet for all 100 workers. She said, 'I get paid off the books. Even though I am working legally, my boss doesn't pay any taxes or social security... I never get a vacation. I never even get a whole weekend off.' She said that in he r current job she was paid $6 for each suit she made, which stores such as J C Penney or Ann Taylor then sold for $120 or more. It is estimated that, still over 150,000 Asian immigrants are working in similar slave

conditions in New York City today.

The US Labor Department estimates that labor costs typically account for less than 3 percent of the retail price of clothing made in the US and as little as 0.5 percent when manufactured abroad. This means huge profit margins for retailers. Paul, A rmand and Maurice Marciano, the three brothers who own the

upscale Guess Jeans, took home a quarter of a billion dollars over the last three years. Last fall, the labor department found that more than a third of Guess contractors were violating wage and overtime laws. In all, workers were owed more than $200,0 00 in back wages. When workers launched a union organizing

drive, owner Paul Marciano called all workers into a meeting. One worker recounted that at the meeting Marciano, who was born in Algeria, explained that he 'came to this country to make money, not to have someone take it from him. He said that before a ccepting a union, he would rather die.

'Not all garment retailers flaunt the mistreatment of their workers. For some, it is a downright embarrassment. In 1996 talk show host Kathie Lee Gifford's clothing line was found to be manufactured by sweatshop workers in

Honduras and New York. As television crews watched, she and her husband Frank showed their concern for workers by handing out envelopes filled with cash to immigrant workers, and handing $9,000 to the garment union office.

After consulting with human rights and union advocates, a group of garment retailers, including Nike, announced a new industry wide code of conduct agreement to curtail sweatshop abuse. Companies, which voluntarily sign on, will be entitled to sew 'No Sweat' labels onto their clothing. But this is a bit like

asking the fox to guard the hen house, especially since the 'independent monitors' will be hired by the corporations.

The solutions are complex, but for immigrants as for other workers: unions are a positive first step. Workers need the protection of a union to stamp out sweatshop conditions and raise wages. That is why some of the most important union organizing drives taking place today involve immigrant workers in the

lowest paid occupations. The United Farm Workers union has launched a union drive to organize 20,000 strawberry pickers in California, seeking a 50 percent increase in wages. Last month 30,000 workers and supporters rallied in the town

of Watsonville, calling for union recognition. Garment workers at Guess are also fighting to win a union. Management tried to fire the ten workers, all of them immigrants, at the center of the union drive, but was forced to rehire them after they threa tened to publicize the company's anti-union record in court. If

these immigrant workers win, all workers will win.


V. Sample Letter to Phil Knight

Mr. Phil Knight

Nike Corporation

Nike World Headquarters

One Beaverton Dr.

Beaverton, OR 97005

30 April, 1998

Dear Mr. Knight,

We are students in a UNC-Chapel Hill class designed to study the contract signed by Nike and our University and the relationship between global economics and corporate responsibility. We are writing to share with you some of our findings and our concl usions. We hope that these insights will be of value to you and your company as you guide Nike down a path that is mutually acceptable to all involved groups. While we do not presume to speak for all students at UNC, we hope that what we offer will be o f assistance to you as you continue to face external challenges.

First, we feel that the most important effort Nike can make is to help educate students about labor issues and the role that Nike plays in Southeast Asian economies. Only by fostering understanding of the complexities involved can Nike hope to garner support for its policies. A good model has been created at UNC; Nike could use this model to sponsor classes taught by well-respected professors that would increase awareness about the company and its practices. While these classes (or information sess ions, speeches, etc…) should cover both sides of the issue, we feel that Nike would benefit from total exposure of the situation. Nike suffers more from anecdotes and myths than from cold hard facts.

Second, Nike must continue to address labor issues and maintain its position as a leader in maintaining worker’s rights. By expanding existing programs and implementing new ones, Nike could demonstrate its commitment to the well being of its workers. While we cannot support this claim with data, it seems intuitive that a few pennies wage increase might cost the company less than the continued bad press Nike has been receiving. The company would benefit greatly from some positive exposure related to worker’s rights. While Nike has clearly made efforts to improve its standards, there remains much work to be done, and it is a great opportunity for Nike to become a social and market trend-setter.

Nike should also play an active role in developing relationships between the companies that subcontract in Asia. If Nike could be seen as a world leader in the effort to organize independent monitoring and cross-industry collaboration, it would undoub tedly benefit from good publicity. Nike is known for having a strong Code of Conduct, but is often attacked by those who say that you do not enforce it. If Nike could eliminate that argument…

Finally, Nike must attempt to improve its role in amateur sports in this country. The place of amateur athletics in our society is a hotly debated issue. (Our own Athletic Director Richard Baddour agrees that we place too much emphasis on sporting eve nts). Even within this crazed environment, however, the athletic apparel business is widely seen as totally out of control in its interactions with athletes and universities. Between allegations of improper payments, free gifts, and ineligibility, shoe manufacturers have changed the face of the game. Nike can and should bring order to the chaos that surrounds college athletics. While it may be okay for an athlete to wear a Swoosh when competing for the University, she should not necessarily be seen as a future billboard. Nike should sponsor events (like Budweiser or anyone else) but must withdraw itself from influencing the game by corrupting young athletes with free merchandise and excess attention.

Mr. Knight, there is a great deal of this that Nike is doing right. Our analysis has concluded that Nike is indeed an industry leader in labor rights and is trying to improve even more. Where Nike can better itself and its image is by taking a more v isible leadership role and by making more improvements faster. They must be visible, strong, and unique. Nike is one of the most powerful companies on the planet. However, if people are going to continue to be willing to pay $150 for a pair of Nike sh oes, they will expect more than just a quality product.

Thank you for your time and your company’s efforts to assist our class at UNC

Catherine Etheridge Adam Smart

Galahad Clark Scott Boze