Nike Factory Workers in Indonesia Illustrate Misleading Portrayal of Wages — ProPublica

Through boom times and, more recently, slumping sales, Nike Inc. has stuck by a key claim about its overseas suppliers: They pay the average factory worker about twice the local minimum wage.

It’s a claim company co-founder Phil Knight first made in the 1990s, when the company faced accusations of sweatshop conditions in the overseas factories hired to make Nike’s apparel. And it’s one the sneaker giant has reasserted since 2021.

But the experiences of workers in Indonesia, Nike’s second-largest production hub, illustrate how misleading the claim can be for vast portions of its supply chain.

When a reporter for The Oregonian/OregonLive visited the country and interviewed roughly 100 workers from more than 10 factories that supply Nike, none said they made anywhere near twice the minimum wage.

“Bullshit,” a union official said, in English, while sitting on a makeshift couch on the porch of his office near Jakarta, the Indonesian capital. (Like most workers currently employed by Nike suppliers, the official did not wish to be named because of fears of retaliation, including fines and termination.)

One worker from a factory in West Java asked a reporter where on the company’s website Nike makes the wage claim.

“No, no, no,” he said, through a translator. “It’s not true.”

“Nike is not paying double the minimum wage,” said a union official in Central Java, a lower-wage area where Nike’s contract factories have been expanding. “The fact is the opposite. Nike is seeking cheaper workers.”

Last year, a ProPublica reporter visited Cambodia and found that only 1% of the 3,720 workers at a former Nike supplier earned at least 1.9 times the minimum wage, based on a factory payroll ledger. Interviews and paystubs for other workers corroborated that earnings are typically closer to the minimum wage than double that amount.

A reporter for The Oregonian/OregonLive subsequently spent seven days in Indonesia, where Nike’s contractors, including its materials suppliers, employ about 280,000 people.

All the workers interviewed said they made around minimum wage, which is as little as $150 a month in some parts of the country.

Sandra Cho, who oversees human rights for Nike, didn’t dispute that some factory workers — including in Indonesia and Cambodia — make less than 1.9 times the minimum wage, describing the figure as a “global average.”

“Some countries will be less than 1.9, some countries will be higher,” she said.

In Vietnam, Nike’s biggest production center, two workers told The Oregonian/OregonLive they made minimum wage — about $204 a month — but two said they made twice as much. That’s in keeping with reports from Nike’s competitor, Puma, which says its biggest factories in Vietnam pay around double the minimum wage.

Nike pushed back when asked whether it’s misleading for its disclosures to highlight the figure of 1.9 times the minimum wage.

“A company trying to mislead would not voluntarily publish wage data, openly acknowledge its journey toward improvement, or subject itself to third-party scrutiny,” Nike said in a written statement.

But the transparency that Nike provides is limited.

The company’s global pay figure is based on data for 700,000 of its roughly 1.2 million workers in its nearly 700 contract factories. In other words, nearly half a million workers are omitted from the math. Nike doesn’t disclose which factories, or which workers, are left out. It’s said that the data covers its biggest partners, which account for an outsize share of production.

(A Nike spokesperson said the wages of the roughly 500,000 workers not included in the calculation are audited to ensure they make at least the minimum wage.)

Nike competitors Adidas and Puma similarly produce wage estimates for only a subset of their suppliers, but they have published data down to the country level in recent years. Adidas reports wage variations within countries. Advocates say the data helps workers determine whether they’re paid fairly and push for pay increases if they are not.

Nike said focusing solely on pay relative to the minimum wage is a mistake.

The company’s main focus with wages is whether they’re high enough to cover basic expenses and a little more, Cho said, a concept known as a living wage. Some countries have minimum wages that meet that threshold, some don’t. Nike has said 66% of workers at its suppliers, at least those for whom it has data, earn a living wage. That’s up from 53% in 2021.

But living-wage calculations can vary widely, and they don’t always match the perceptions of people on the ground. Workers interviewed near Jakarta, where the local minimum pay rate is ostensibly more than a living wage, said it’s not enough to live on.

One said she wakes up seven days a week, before the sun rises, to set up a small shop in front of her home.

She sells groceries, gas canisters for cooking, water, cigarettes and snacks, mostly to housewives buying daily necessities.

She opens the store around 6 a.m.

A half hour later, on weekdays, she leaves for her job at the factory. Over the next eight hours, while her husband minds the shop, she works standing up, often in sweltering conditions, cutting fabric for 1,600 pairs of Nike sneakers — one every 18 seconds.

She returns to her small apartment around 6:30 p.m., eats a quick dinner of instant noodles, then goes back to the shop until 10 p.m.

She earns around $300 a month from making sneakers, just about minimum wage. The store brings in another $60.

“I always come home late, sometimes in the heat and rain,” she said through a translator, “but I still endure it to meet me and my child’s needs.”

A History of Dueling Numbers

Nike’s beginnings were rooted in the low labor costs that overseas manufacturing could offer.

In 1962, while working toward a master’s degree in business administration at Stanford University, Knight wrote an academic paper that became the company’s basic business plan. A core pillar: the disruptive power of cheap labor.

“Low Japanese labor costs make it possible for an exciting new firm to offer these shoes at the low low price of $6.95,” Knight wrote in 1964 in his first ad, according to his 2016 memoir, “Shoe Dog.”

In his book, he also wrote about the crushing poverty he saw on an around-the-world trip as a 24-year-old. Knight, who did not respond to detailed questions for this article, wrote in the book that hiring low-wage workers in developing countries would spur economic development.

The first decades of Nike’s history backed up his belief. As the economy bloomed in Japan and wages rose, Nike shifted production from Japan to Korea and Taiwan and, later, Indonesia and Vietnam.

“Thirty years ago, Nike shared that responsible participation in global manufacturing could accelerate economic development in emerging economies,” Nike said in its statement. “History has largely validated that.”

When Nike arrived in Indonesia in 1988, the country offered an enticing economic carrot to companies hunting for overseas factories: a minimum wage around $1 a day in Jakarta, compared with $8 in South Korea, $14 in Taiwan and $33 in Tokyo, according to a 1988 U.S. State Department report.

But Indonesia also presented new problems. The country was a target of activists because of its history of human rights abuses.

As companies ramped up production there, anti-sweatshop protests and negative press accounts multiplied, with some noting the country’s minimum wage was so low that many factory workers were malnourished.

Numerous stories took aim at Nike, whose soaring success, coupled with its popular athletic endorsers and corporate aloofness, made it a rich target.

The early coverage included a memorable 1992 story in Harper’s Magazine that showed the paycheck of an Indonesian factory worker who made $1.03 a day at the time and concluded she’d need to work more than 44,000 years to match Nike endorser Michael Jordan’s annual Nike income.

Knight and Nike pushed back on the criticism. Where Knight once sang the praises of low wages, he and the company now boasted the company’s suppliers paid generously.

In 1996, Nike distributed a fact sheet that said the median wage in its Indonesian factories was $108.65 a month, or more than double the minimum wage. In June of that year, Knight wrote a letter to the editor of The New York Times saying Nike “has paid, on average, double the minimum wage” to factory workers. A month later, he told CNN Nike paid “over two times” the minimum wage in Indonesia. He told shareholders in 1996 that pay was “double the minimum wage throughout Indonesia.”

The Associated Press, The Wall Street Journal, Time Magazine and the editorial board of The Oregonian, the biggest newspaper in Nike’s home state, all repeated the claim.

But The Oregonian/OregonLive and ProPublica could find no contemporaneous data that supported Nike’s assertion. Neither could Nike.

“Those statements were made nearly 30 years ago, based on the data and understanding available at the time, and reflected a broader belief that responsible participation in global trade could raise incomes and expand opportunity in emerging economies,” Nike said in its 2026 statement. “Like most companies, we do not retain granular factory-level payroll data from partners in the mid-1990s.”

The Oregonian/OregonLive and ProPublica found plenty to challenge the claim, including statements by the company itself. In fact, between 1994 and 2001, four reports issued directly by Nike, done at the company’s request or compiled by the U.S. government never put the average wage in Indonesia higher than 37% above the minimum.

When asked to address the contradictory numbers from the 1990s, Nike said via email: “What’s relevant today is how Nike operates now, including the rigor of our current disclosures, the progress we’ve made, and the work still ahead to advance wages and opportunity across our supply chain.”

The accuracy of Nike’s past wage claims didn’t go unchallenged.

In 1998, California labor activist Marc Kasky sued Nike, alleging several claims about its overseas factories were “deceitful” and false advertising.

He submitted a pile of Nike statements as evidence, including Knight’s letter to the editor of The New York Times.

Nike said in a court filing, without admitting any of its statements were inaccurate, that those statements were not subject to a court’s opinion about their veracity. The company’s words were protected by the First Amendment, Nike wrote, because they were intended not to sell Nike products but to answer Nike’s critics concerning “issues of public interest.”

Nike settled the lawsuit in 2003, for $1.5 million, without admitting fault. The money was earmarked for factory monitoring and programs for workers, including economic ones.

Taking on Second Jobs

Since the Kasky settlement, Nike has published nearly 2,000 pages of reports on its work to become a better corporate citizen. The closest it came to shedding new light on wages was in 2021, when the company reported on new efforts to understand what factory workers earn.

The 184-page report said that workers had “average gross pay of 1.9 times the minimum wage” — almost identical to the assertion the company made back in the ’90s.

The company said it based the claim on information from 103 “strategic suppliers” in 13 countries that employed over 700,000 workers. The report did not identify the suppliers or disclose the wages paid to workers.

Nike reiterates the claim in a disclosure currently posted on its website, which has been updated with 2022 data. It’s now based on data from 111 factories.

Workers in Indonesia reported wide deviations from the company’s stated average pay for the supply chain as a whole.

The workers’ accounts of earning minimum wage or a little bit more are consistent with 63 paystubs from three Indonesian factories, which The Oregonian/OregonLive and ProPublica obtained from a labor group. At two factories, workers averaged 1.1 times the minimum wage. At the other factory, workers averaged 1.4 times the minimum.

Those numbers align with disclosures of Adidas and Puma, which have released more information about factory wages than Nike.

In its 2024 annual report, Adidas said nearly 100,000 of its factory workers in Indonesia made between 1.1 and 1.4 times the minimum wage. Data from Puma’s 2024 sustainability report indicated that workers at four Indonesian suppliers averaged $208 in monthly wages, 17% above the average minimum wage where the factories were located.

Presented with detailed questions about pay practices, Nike said looking at pay relative to the minimum in isolation “misses the broader picture of real wage growth and economic development” in countries where Nike sources its goods.

In Vietnam, Nike’s contract factories account for 2.5% of the country’s gross domestic product, according to a 2019 diplomatic cable obtained by The Oregonian/OregonLive.

“We’re proud of the role Nike and our industry have played in building employment, skills, and opportunity in many countries, including Vietnam today, where the industry contributes meaningfully to national GDP,” the company said, adding that it remained “committed to pushing for continued improvement.”

Nike’s Cho said the company’s work to lift wages includes a program that’s helped female workers advance into higher-paid positions. Roughly 80% of factory employees are women, Cho said, but men are 2.5 times more likely to get promoted off the manufacturing line. She said 21% of participants in the program got a promotion within three months.

The company said what matters more than what people are paid relative to the minimum wage is whether they make enough to cover basic expenses. Some regions of Indonesia, including Jakarta, have minimum wages higher than local living wage estimates by the WageIndicator Foundation, an independent Dutch nonprofit.

The living wage “is where we focus our energy and work,” said Nike’s Cho.

But an income that meets the living wage benchmark on paper doesn’t always match what workers say they need, at least in Indonesia.

Standing in an overgrown lot outside Jakarta, 30 workers broke into laughter when asked if they got paid enough to cover their basic expenses.

One said factory wages weren’t enough to pay for new uniforms, books and shoes for school-aged children.

Another worker estimated as much as 70% of her coworkers had second jobs, a comment that drew approving nods. That work includes operating motorbike taxis, fish farming, collecting scrap metal and cleaning fruit, workers said. Some workers sell goods inside the factory, including coffee, snacks and cosmetics, which they said comes with the risk of disciplinary action, including termination.

Knight once told documentary filmmaker Michael Moore that factory jobs were such a road to upward mobility that someone working in an Indonesian factory making Nike goods might someday be Moore’s landlord.

Two workers who invited a reporter into their homes in a neighborhood near Jakarta last summer were not landlords.

They lived in 150-square-foot barracks-style apartments with almost no furniture except for thin mattresses, which had been propped against the wall to create living space. Small electric fans cooled the apartments, which cost around $30 a month to rent.

Workers largely agreed Nike contract factories are preferable to local alternatives. Nike factories are clean and pay on time, they said. Many have exhaust fans that can provide some relief from the tropical heat. Forced overtime is no longer a problem. Government regulations tend to be followed.

But the workers said wages remain chronically low, describing the typical pay as only enough to support one person.

“It’s as if the company wants us to stay single forever,” a worker near Jakarta said.

Another worker said she started stitching Nike sneakers 25 years ago, about the time Knight spoke to Moore about workers becoming landlords.

She said after all those years, she makes $300 a month — roughly the local minimum wage.