Nike Inc. has announced plans to raise minimum wages 25 percent for factory workers in Indonesia. The giant shoe manufacturer has received much criticism for its labor practices in Asia.
Many Indonesians have been hard-hit by the financial crisis throughout Asia. The monthly minimum raise of 250,000 rupiah, about $23, is much-needed. The preceding government-mandated monthly minimum wage was 200,000 rupiah, or $18.
Even after the increase, only about 50 percent of Nike’s 70,000 factory workers in Indonesia are paid at or above the minimum wage.
“We surveyed the workers about how much a basket of goods cost, what their money buys now, and determined the financial crisis was hitting them harder than in other parts of Asia,” said Nike spokesperson Vada Manager.
Nike’s action has been anticipated for some time, considering that top competitor Reebok International increased its wages in Indonesia to 20 percent over the government minimum earlier this month.
“This is great progress. Just a year ago the subcontractors were not even paying minimum wage,” said human rights group Global Exchange spokeswoman Medea Benjamin.
