Nike comes clean, when will Wal-Mart?

Did Phil Knight have an epiphany?

Nike, long the subject of sweatshop allegations, yesterday produced the most comprehensive picture yet of the 700 factories that produce its footwear and clothing, detailing admissions of abuses, including forced overtime and restricted access to water.

Some other great things the Nike factories were doing to their employees:

The report admits to widespread problems, particularly in Nike's Asian factories. The company said it audited hundreds of factories in 2003 and 2004 and found cases of "abusive treatment", physical and verbal, in more than a quarter of its south Asian plants. Between 25% and 50% of the factories in the region restrict access to toilets and drinking water during the workday. The same percentage deny workers at least one day off in seven. In more than half of Nike's factories, the report said, employees worked more than 60 hours a day. In up to 25%, workers refusing to do overtime were punished. Wages were also below the legal minimum at up to 25% of factories.

Admitting human rights abuses in their factories is a major step forward. Nike's stock will suffer during this period, unless other key retailers follow suit and come clean about their sweatshops.

Nike has joined the Fair Labour Association, a group that includes other footwear and clothing makers, as well as NGOs and universities, which conducts independent audits designed to improve standards across the industry. The company said it needed further cooperation with other members of the industry. "We do not believe Nike has the power to single-handedly solve the issues at stake," the company said in the report. Mr Posner said retailers such as Wal-Mart bore huge responsibility for keeping prices low and consequently compounding poor working conditions in factories overseas. He said that the likes of Nike and Adidas needed to work together to gain some kind of counterweight.

Counterweight? Yes, a counterweight to Wal-Mart. Wal-Mart is devilishly effective in hiding the conditions at its major factories, and doesn't appear to want to make any changes to them. According to Congressman George Miller's report, here at home in the good 'ole USA, taxpayers would have to pick up $420,750 per year for a typical Wal-Mart store employing 200 people. These costs include:

• $36,000 a year for free and reduced lunches for 50 qualifying Wal-Mart families;
• $42,000 a year for Section 8 housing assistance, assuming three percent of the store’s employees qualify for such assistance;
• $125,000 a year for federal tax credits and deductions for low-income families, assuming 50 employees are heads of household with a child and 50 are married with two children;
• $100,000 a year for additional Title I education funds, assuming 50 Wal-Mart families, each with an average of two children, qualify;
• $108,000 a year for children’s health insurance costs, assuming 30 employees, each with an average of two children, qualify for the Children’s Health Insurance Program (CHIP);
• $9,750 a year for subsidies for energy assistance for low-income families.

Oh, and don't forget the slave labor practices, as documented by the National Labor Committee:

• 13- to 16-hour days molding, assembling, and spray-painting toys-8 a.m. to 9 p.m. or even midnight, seven days a week, with 20-hour shifts in peak season.
• Even though China’s minimum wage is 31 cents an hour-which doesn’t begin to cover a person’s basic subsistence-level needs-these production workers are paid 13 cents an hour.
• Workers typically live in squatter shacks, seven feet by seven feet, or jammed in company dorms, with more than a dozen sharing a cubicle costing $1.95 a week for rent. They pay about $5.50 a week for lousy food. They also must pay for their own medical treatment and are fired if they are too ill to work.
• The work is literally sickening, since there’s no health and safety enforcement. Workers have constant headaches and nausea from paint-dust hanging in the air; the indoor temperature tops 100 degrees; protective clothing is a joke; repetitive stress disorders are rampant; and there’s no training on the health hazards of handling the plastics, glue, paint thinners, and other solvents in which these workers are immersed every day.
• These factories employ mostly young women and teenage girls.

Wal-Mart, renowned for knowing every detail of its global business operations and for calculating every penny of a product’s cost, knows what goes on inside these places.

Yet, when confronted with these facts, corporate honchos claim ignorance and wash their hands of the exploitation: "There will always be people who break the law," says CEO Lee Scott. "It is an issue of human greed among a few people."