People Are The True Cost Of Nike’s Low Prices

Nike recently got caught red-handed, again, by an underground Australian news reporter who discovered horrific sweatshop conditions for apparel workers in Malaysia. This time the story is worse than low pay or bad conditions. It’s pure forced labor and human trafficking.

Mike Duffy, a reporter for Australia’s Channel 7, posed as a fashion buyer and gained access to an otherwise inaccessible Nike factory in Kepong, Malaysia. He found hundreds of workers from Bangladesh, Nepal, Vietnam and Burma living in cramped, squalid conditions, paid a few dollars a day, and, the worst part, with no way of leaving.

Here’s what Duffy found. While still in their home countries the workers are offered a job in the factory for an upfront fee. Of course none can pay this fee since they are poor, so instead they are given a job and their passports confiscated until they can repay the debt they now owe. They also sign 3-year contracts and are literally locked in the factory facility until they can repay their debt, which is just about impossible given their low pay.

This kind of treatment of workers is unacceptable, but I’m left wondering how does this happen? Nike has been on watchdog lists for years since gross human rights violations were first discovered in the 90’s in their factories. Nike has put out statement after statement and policy after policy to avoid this kind of scandal and yet it’s happening again and they seem truly shocked.

And therein lies the problem. Nike has repeatedly treated its human rights violations as public relations problems rather than justice problems with a deeper cause. They continue to demand low prices from their factories while insisting the factories adhere to their list of decent working conditions requirements. If the factories can’t keep costs low, Nike moves on to another factory. Nike seems to put much more weight on the economic success of the factory, and naturally their factories hope they can successfully hide the corners they cut in order to deliver on price. Only one factory was caught in this investigation but the same pressure to keep costs ultra-low remains on all of them. What other atrocities are going on and Nike, what are you going to do to stop them once and for all?



  1. heatherlsimpson said,

    August 5, 2008 at 1:50 pm

    Great Post! People are the true cost of low prices. Check this out,

    ~Heather Simpson

  2. Vadim said,

    August 7, 2008 at 8:58 am

    The problem is that no mainstream shoe company makes shoes in fair-trade conditions. We don’t have a lot of choice in buying Nike or Adidas or PUMA. What we need is a market for shoes not made in sweatshops. We need to show all the major shoe companies (and, by extension, all apparel companies) that we can have a market for clothing made with human rights in mind.

    This is the best solution I can find:

    We will commit to buy a shoe by the first company that makes a sweatshop-free product (and makes it widely available). I honestly think this is the best solution. It’s not a boycott but an incentive. I think the only way shoe companies will listen is if there is an economic incentive for them to do so.

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