Living Wage: Response from Nike

Summary: Nike’s planned inclusion of a ‘fair wage’ in its code of conduct for suppliers is a step forward. But payment of a living wage should not be linked to expected increases in productivity.

Nike will amend its code of conduct for suppliers to reflect changes to the Fair Labour Association’s (FLA) code, which now states, “Every worker has a right to compensation for a regular work week that is sufficient to meet the worker’s basic needs and provide some discretionary income”. The benchmark for ‘fair wages’ will be agreed by FLA business and NGO representatives. Nike is also looking into ‘Equitable Manufacturing’ which focuses on: wages (are workers earning enough); skills training and increasing productivity/lean production; and ‘wise spending (through e.g. co-ops). The FLA launches a pilot project on purchasing practices in January 2012. The pilot focuses on ethics, quality and price and scores employers accordingly.

Play Fair’s view:

Playfair views the inclusion of a ‘fair wage’ in Nike’s code of conduct for suppliers as a step forward. However, agreement about how a ‘fair wage’ is calculated and implemented must include trade unions as elected worker representatives. Likewise, trade unions and NGOs should play a role in monitoring Nike’s purchasing practices during the pilot project. Payment of a living wage, which will enable workers making Nike products to live in dignity, should not be linked to expected increases in productivity or ‘leaner’ production. A living wage is a human right.