Nike's Indonesia Shoe Plant: Boon Or `Sweatshop'?

The young women are the daughters of rural farmers, village schoolteachers or shop clerks. Now they live together in the Indonesian factory town of Serang, a dozen to a dormitory room, sleeping on bunks.

They spend most of their time in a nearby Taiwanese-owned factory, where they are paid $2.28 a day to cut the soles, sew the seams and run the machines that make the most popular - and controversial - athletic shoe in the world: Nike.

And most say they like it.

Factories such as the one in Serang, which employs 18,000 Indonesians, have come to symbolize the role of American companies in the developing world.

Critics have singled out Nike, with its long history of manufacturing in Asia, its $140 shoes and its stable of such athletic superstars as Michael Jordan on the payroll.

Some in the United States deem Nike factories in Indonesia "sweatshops." But Oregon-based Nike says American investment in such countries as Indonesia has placed those countries on the road to prosperity.

Per-capita income in Indonesia, for example, has more than tripled in the past 20 years, bringing with it a dramatic decline in poverty.

Critics are unimpressed. "It's not possible to see how these workers feel just looking at the numbers," said Jeff Ballinger, who leads a one-man organization called Press for Change that has dogged Nike for years. "It's a bigger picture than `Is the economy getting better?' and `Are rural people climbing out of poverty?' "

Country is booming

But it is clear that Indonesia is booming and poverty is falling, relative to its impoverished past. . Many of the 120,000 Indonesian workers who produce Nike shoes, most of them rural and poor, say factories like Serang's provide a chance to save money and to send the extra cash back to families.

"Thanks to God, it's enough money for me," said one young woman from central Java who has been working for three years.

"I came here one year ago from central Java," said a girl who at 17 was the youngest interviewed. "I'm making more money than my father makes."

But not all the workers who make Nike shoes in Indonesia are happy. An Indonesian woman named Sadi Sah said she and 23 other workers had been fired from a Nike-producing factory for asking to be paid the minimum wage. She toured the United States this summer under the auspices of anti-Nike groups, holding news conferences and leading demonstrations.

Nike says she and others were fired after they went on strike over wages and damaged the factory.

Ballinger says Nike-producing Asian factories fail to pay the Indonesian minimum wage and improperly dismiss or harass workers, even slap them.

"I'm not saying (American investment) won't in the long run lead to better conditions for some workers, but why does the process have to be so brutal?" asked Ballinger, who formerly worked for the AFL-CIO in Indonesia.

"Whether you like Nike or don't like Nike, good corporations are the ones that lead these countries out of poverty," said Nike Chairman Philip Knight in an interview. "When we started in Japan, factory labor there was making $4 a day, which is basically what is being paid in Indonesia and being so strongly criticized today. Nobody today is saying, `The poor old Japanese.' We watched it happen all over again in Taiwan and Korea, and now it's going on in Southeast Asia."

Nike doesn't own factories

Nike shoes and their forerunners have been manufactured by contractors in Asia since the company's beginnings in 1964. Nike does not own these factories; it works in partnership with local owners or with Taiwanese or Korean owners.

Ninety percent of the workers in Serang are women, most about 19 or 20 years old. At least 10,000 live at the factory compound, where they are given three meals each day in a huge hangar-like cafeteria. There is a television set inside, and a stage is set up outside for parties and sing-alongs. There is a mosque, a chapel and a convenience store.

They earn the legal minimum wage of about $2.28 a day. In Indonesia, less than half of the working population earns the minimum wage, so these workers are among higher-paid Indonesians.

The dormitory rooms at the Serang factory are small, but also airy. No one is forced to live in them; most choose to do so to save money. The factories are relatively clean, the ceilings are high, and windows provide ventilation.

Normal working hours are 40 hours each week, seven hours Monday through Friday and a half-day on Saturday. Lunchtime is one hour.