NIKE Factory Workers in SE Asia Help Support Their Families and Have Discretionary Income, According to Preliminary Findings of Study By MBA Team From Dartmouth's Tuck School|
PR Newswire - October 16, 1997 07:19
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BEAVERTON, Ore., Oct. 16 /PRNewswire/ -- Preliminary findings from a study
of worker's spending patterns in Vietnam and Indonesia by a team from
Dartmouth College indicates that NIKE (NYSE: NKE) contract factory workers can
meet basic needs and, in addition, have income for discretionary spending or,
in some cases, savings.
"The Tuck Team's data suggests NIKE workers in Indonesia and Vietnam can
more than make ends meet," according to Eugene B. Mihaly, who co-supervised
the Tuck project along with Professor Joseph A. Massey, Dartmouth Center for
Asia and the Emerging Economies. Mihaly is an adjunct professor of
International Business at Dartmouth's Amos Tuck School of Business.
Other key findings include:
-- In Vietnam, the factory worker monthly wages (mean) at the Sam Yang and
Chang Shin factories (located in the Dong Nai province) are approximately
554,000 VND ($47 USD) and 653,000 VND ($56 USD) respectively. After incurring
monthly expenses on essentials (food, clothing, etc.) of 322,000 VND ($27 USD)
and 348,000 VND ($29 USD) respectively, the workers documented savings or
discretionary monthly income between 232,000-305,000 VND ($19-$26 USD). The
monthly minimum wage is $35 USD in Dong Nai where Chang Shin is located and
$45 USD in Cu Chi, the locale for Sam Yang. According to the research, the
annual per capita income of NIKE contract factory workers at these two
facilities is between $545-$566, well above the estimated $250-300 annual per
capita wage cited by other country income research.
-- In Vietnam, daily food expenditures for individuals are between
40 cents and 43 cents. (USD)
-- In Indonesia, where many wage and benefit allowances are mandated by
law, surveyed workers across all demographic groups earned an average of
250,000 Rp ($96 USD) monthly. This figure includes both legally required wage
benefits and non-mandated benefits such as attendance bonuses and other
supplemental factory income. In addition, the minimal levels of overtime
(mostly voluntary and in some factories, required) during this period in
1997 comprise a portion of this wage rate. The mandated Indonesian minimum
wage is 172,500 Rp ($66USD) per month.
-- In Indonesia, almost 90% of the single respondents living away from
home send money to their families.
NIKE President & COO Thomas Clarke responded to the study results by
stating, "NIKE has created 500,000 highly desired, good paying jobs in
32 countries including, Vietnam and Indonesia. Every job vacancy attracts
hundreds of people seeking a job in a NIKE contract factory. This study marks
the first instance where a research team from a prestigious business school
has been able to examine wages and expenditure patterns using two highly
reliable sources the actual household spending of workers themselves and the
The research was conducted over several weeks in both countries, utilizing
methodology that included extensive household interviews and questionnaires
with NIKE and non-NIKE factory workers; surveys in local food markets to
determine spending patterns and a "market baskets of goods" of food staples;
and, reviews of past wage and living studies in the two countries conducted by
the World Bank and non-governmental organizations who have published
research on living standards in developing economies.
The NIKE study was conducted by MBA candidates from Dartmouth University's
Amos Tuck School of Business, located in West Lebanon, New Hampshire.
The faculty/MBA student team from Dartmouth's Tuck School have also
conducted business analyses and research for other global companies including
Disney, Citibank, Motorola and Hewlett Packard.
For more detailed information about NIKE's manufacturing practices, please
refer to: www.nikeworkers.com on the Internet
/CONTACT: Vada Manager of NIKE, 503-671-2875/