SUMMARY

Nike has been criticized for contracting with factories (known as Nike sweatshops) in countries such as China, Vietnam, Indonesia and Mexico. Vietnam Labor Watch, an activist group, has documented that factories contracted by Nike have violated minimum wage and overtime laws in Vietnam as late as 1996, although Nike claims that this practice has been stopped. The company has been subject to much critical coverage of the often poor working conditions and exploitation of cheap overseas labor employed in the free trade zones where their goods are typically manufactured. Sources for this criticism include Naomi Klein's book No Logo and Michael Moore documentaries. During the 1990s, Nike faced criticism for the use of child labor in Cambodia and Pakistan in factories it contracted to manufacture soccer balls. Although Nike took action to curb or at least reduce the practice, they continue to contract their production to companies that operate in areas where inadequate regulation and monitoring make it hard to ensure that child labor is not being used. In 2001, a BBC documentary uncovered occurrences of child labor and poor working conditions in a Cambodian factory used by Nike. The documentary focused on six girls, who all worked seven days a week, often 16 hours a day. Campaigns have been taken up by many colleges and universities, especially antiglobalisation groups, as well as several anti-sweatshop groups such as the United Students Against Sweatshops. As of July 2011, Nike stated that two-thirds of its factories producing Converse products still do not meet the company's standards for worker treatment. A July 2011 Associated Press article stated that employees at the company's plants in Indonesia reported constant abuse from supervisors.

QUESTION 1:

In the Nike case the major ethical and social issues that were discussed were mainly about the poor labor practices that Nike is involved with. From sweatshops, to child labor, to workers abuse Nike has received wide spread criticisms from across the board. After the statements of Kathy Lee Gifford about Michael Jordan and Nike, the sweatshop movement against Nike had begun (Carrol and Buchholtz, 2006, p. 671) and Nike since then would be spending much effort and press work to recoup its name and to remedy the accusations it would so rigorously receive soon after. Though it seems as if time and time again Nike proves its accusers wrong or attempts to correct its own mistakes when the public brings these mistakes to the attention of Nike, it never seems to be enough for the whistle blowers and the finger pointers. Non-the-less the chapter of Nike and the social responsibility microscope it was viewed under had begun in 1996 (Carroll and Buchholtz, 2006, p. 673) and would be paying for to this day.

Sweatshops have been a source from low expense workers, and major ridicule for quite some time now. So what makes Nike so special? As the corporate responsibility manager, Harsh Saini, said, it is a very big sexy brand name (Carroll and Buchholtz, 2006, p. 674) and therefore it is easier to catch the publics eye. Michael Jordan being one of the biggest, if not the biggest, super stars of the time was being sponsored by this very big sexy brand name. So it is difficult to imagine many people turning a corner in the major cities that they lived in or after watching an hour of television and not to see the Nike Swoosh, or an Air Jordan commercial, or even any of the other hundreds of products, people, or organizations that Nike sponsored. If Nike could afford the greatest national sports hero of the time it must be a good wholesome company right? Nike of course was not quiet when accused of dealing with or having sweatshops under its constituent by stating that the entry-level income of an Indonesian factory is five times that of a farmeran assistant line supervisor in a Chinese subcontracted factory earns more than a surgeon with twenty years of experience (Carroll and Buchholtz, 2006, p. 672). According to such statements it would seem that Nike is doing a very good job by providing such wages to its workers. These statements are often refuted as Hightower (1997) noted that the average Vietnamese worker earns a dollar and sixty cents per day when the average cost of food is two dollars and ten cents. But to stick to the ethical and social issues that Nike was faced with, it soon got much heat from a newly formed organization as an offspring of UNITE called The United Students against Sweatshops or the USAS. Students are a major clientele for Nike, since Nike endorses many schools. This would spell more trouble for Nike. According to Carroll and Buchholtz (2006) USAS as The Students of the Nike Awareness Campaign protested against Nike due to the alleged sweatshop abuses (p. 673). Due to many uprisings, consumer backlash, and human rights issues the Fair Labor Association or the FLA was formed. The FLA is, a non-profit organization dedicated to ending sweatshop conditions in factories worldwide and building innovative and

sustainable solutions. Of course given Nikes slandered reputation and needing to improve its status amongst the people Nike jumped in joining the organization right away.

QUESTION 3 : I think that it is wrong that endorsers are being paid. Some may argue about the ethical implications of Nike paying millions of dollars on endorsements while the factory workers only receive a few dollars a day. When you see statements like Nike will spend $476 million this fiscal year in exchange for endorsements (Rovell, 2006, para. 4), it makes you wonder how they can afford all this. Nike also stated that Indonesian workers alone make fifty million dollars a year at the time that they were paying Michael Jordan twenty million per year (Carroll and Buchholtz, 2006, p. 672). When you see these statements together it can be unnerving and infuriating, but one must keep in mind that Nike is a business. Millions of people see Michael Jordan (in his prime), LeBron James, Kobe Bryant, and so on every day. Therefore millions of people see these people wearing Nike every day. Nike is essentially paying for walking billboards. Consider the workers here in the U.S. Not many people here make millions of dollars through Nike so how come we dont protest that? The few dollars a day that these people work for, though it may be tragic, should not be compared to Nikes marketing plan. Can Nike take a million dollars here and there to improve the lives of these people? Of course they can, but that would only a discretionary measure and not so much an ethical one. In this particular scenario of wages versus endorsements it can be very well said that the ones earning the endorsements are grossly overpaid, but the two are incomparable because one is an advertising cost and the other is wage cost. The low wages given to these people is unethical, but not because the endorsees get paid too much. It is because the endorser doesnt pay the factory workers enough.

QUESTION 7: Regarding the Kasky v. Nike, Inc. case, is Nikes defense of its practices commercial speech or political speech? What are the long-term implications of your decision, not only for Nike but also for business in general? Kasky vs Nike was the title of a landmark legal case in which Marc Kasky, a resident of San Francisco, launched a legal action in April 1998 against Nike in which he claimed that public statements by the company had misrepresented factory working conditions. At the heart of the case was that the statements made by the company were "commercial speech"

and thereby subject to regulatory restrictions relating to false and misleading advertising an not protected by the U.S. Constitution's First Amendment. The case was settled out of court in September 2003. The implications of this decision are staggering. Although courts traditionally have assumed that commercial speech is limited to product advertising and labels, the California Supreme Courts three-part test for identifying commercial speech encompasses almost all business speech. Businesses exist to make money; nearly every word they utter is likely to reach potential customers and is intended, at least in part, to advance pecuniary interests. Even more alarming, as the three dissenters pointed out, the majority expressly found it irrelevant that Nike was responding to charges publicly raised by others and was thereby participating in a public debate on the ethics of using labor in less developed countries. The decision allows Nikes critics to level charges with relative impunity but hinders the companys opportunity to respond, and thus handicap[s] one side of this important worldwide debate. The mere fact that Nike participates not only in the marketplace of ideas, but also in the marketplace of manufactured goods, noted one dissenter, should not strip it of the breathing room that all others enjoy when engaging in public discussion. The U.S. Supreme Court will hear oral arguments on this case in the spring, and a decision is expected by the end of the Term this summer.