Job Opportunity or Exploitation?

BIEN HOA, Vietnam —  Nguyen Thi Dong has never heard of Tiger Woods or Michael Jordan and has never worn a pair of sneakers. But she knows this for sure: Her assembly-line job at the Nike plant here rescued her from poverty. It is a job she wants to keep for “10 years anyway, maybe forever.”

Dong, who is 27 and has a seventh-grade education, lives with her parents in a small house that has electricity and a TV. When the prices of rice and chicken are low, she can save a few dollars from her $42 monthly paycheck. Her sister also works for Nike. Her best friend hopes to hire on soon.

The factory to which she bicycles six days a week is clean, modern, well-ventilated. When told that U.S. human rights groups had--until recent company reforms--accused Nike of running sweatshops staffed by underpaid, overworked, mistreated laborers, she replied: “That’s strange. Why?”

In many ways, Dong is a symbol of the clash between the agrarian and industrialized worlds. She is the cheap labor that factories migrate in search of, and in her small world, the line between opportunity and exploitation is a thin one. Jobs are scarce in Southeast Asia and getting scarcer because of the continent’s economic crisis, and for millions of unskilled Vietnamese, a job at Nike would seem a prize not much shy of hitting the lottery.

Nike’s five Taiwanese and South Korean subcontractors in Vietnam pay an average monthly wage of about $65, more than twice what a teacher earns and considerably above the salary of a young doctor at a state-run hospital. With a payroll of 43,000, Nike is Vietnam’s largest private employer, and its footwear and apparel account for 7% of the nation’s exports. The turnover at the Tae Kwang Vina plant here in Bien Hoa, 18 miles northeast of Ho Chi Minh City (the former Saigon), is less than 1% a year.

“If they didn’t have jobs here, most of the women you see would be planting rice or working part-time city jobs,” said Than Thi Hoa, 31, who makes $175 a month supervising 1,300 workers and is part of Vietnam’s emerging middle class. She and her husband, an army officer, both have motor scooters. Their home has running water, a refrigerator, a stereo and a TV. Their daughter goes to an upscale school. They save about 10% of their income.

Make no mistake, though. Nine hours a day on an assembly line--stitching, trimming, gluing, painting, cutting, boxing, meeting quotas in silence--is no walk in the park. And the five subcontracted plants in Vietnam that produce Nike products can hardly claim an unblemished record in labor relations or working conditions.

At various times in 1995 and 1996, workers at one plant were forced to run around the perimeter of three warehouses for punishment. A dozen fainted in the 100-degree heat. At another plant, a Taiwanese forewoman lined up 125 assembly-line workers and slapped them with the sole of a sneaker. A Korean forewoman at a third facility made workers lick the factory floor for misdemeanors, and employees at yet another factory were led in chants of “Loyalty to the boss!”

In 1997, Nike’s image was further tarnished when Dara O’Rourke, an environmental researcher at UC Berkeley, made public a report that accounting firm Ernst & Young had prepared for Nike’s internal use. Among its findings: Laborers at the Tae Kwang Vina plant were working 65 hours a week in 1996, and air quality in the factory was so bad that 77% of them had respiratory problems.

“The truth is, Nike’s factories were never any worse--and in some ways were better--than other companies’ factories here,” said Brian Quinn, Vietnam representative for Harvard University’s Institute for International Development. He has tracked Nike’s operations in Vietnam for the last four years.

Scores of foreign-run factories, producing everything from trucks to detergent, have popped up in Vietnam since Hanoi started moving toward a free-market economy in 1989. Here, for example, in the industrial zone where Nike is situated on the site of an old U.S. military base, there are 80 factories that produce, among other things, textiles, cigarettes, electronics, semiconductors and champagne. Among the widely known companies that have set up shop here are Nestle and Sanyo.

“But Nike got targeted early,” Quinn said, “and its first reaction was to close the doors to independent monitors, journalists, inspectors. When that happens, people say, ‘Let’s go see what’s wrong there.’ It was a serious failure to communicate.”

Nike apparently also failed to understand Vietnam itself. Although it is one of the region’s poorest countries--per-capita income is about $1 a day--Vietnam has tough labor unions. Strikes are legal, the Communist government is active in its defense of workers’ rights, and Vietnam’s historical sense of having been taken advantage of by foreigners often makes the country suspicious, inflexible and difficult to deal with.

Last May, Philip H. Knight, Nike’s founder and chief executive, bowed to international pressure. He defended Nike’s record of creating jobs and improving factory conditions in Asia but, in announcing sweeping reforms, admitted, “The Nike product has become synonymous with slave wages, forced overtime and arbitrary abuse.”

As part of those reforms--which include a new openness--a journalist and his interpreter were recently given unrestricted access to Nike’s factories. They found that the quality of the free daily cafeteria lunches provoked some upturned noses. But otherwise, there were no substantive complaints about wages, working conditions or the conduct of foreign supervisors.

“It’s a good job, better than what most of my friends have,” said Vo Tien Sy, 23, who earns $47 a month, 10% over the minimum wage that foreign companies must pay in Dong Nai province. “My only complaint is that they cut overtime to 200 hours a year. I’d like more overtime.”

In addition to reducing overtime, Nike in the last year has raised the minimum age for employment at its footwear plants to 18 (although children can work at 14 in Vietnam with their parents’ permission). New ventilation systems have been put in place, lead-based paints have been eliminated, solvent-based adhesives are being replaced with water-based ones to reduce hazardous chemicals, and independent monitors have for the first time been given access to Nike plants.

A spokesman for the Vietnam Labor Union Federation said that for the first time in memory, his office received not a single complaint last year about working conditions at Nike plants. Even O’Rourke, the Berkeley researcher and longtime Nike critic, has praised the company’s initiatives. He said in March that the number of workers at the Tae Kwang Vina factory reporting nose and throat complaints fell to 18% of the labor force in 1998 from 86% in 1997. Although he said problems remain, he gives Nike high marks for making progress.

“Things are changing, and for the better,” said another frequent critic, Medea Benjamin, director of Global Exchange, a San Francisco-based human rights organization focusing on labor issues.

She added: “There’s been significant progress in health and safety issues, and letting in independent monitors is a major step forward. But we still criticize Nike and others for not being the best-paid places around to work, for not lifting workers out of poverty.”

Economists reply that multinational factories have a responsibility to pay competitive wages but not to change the living standards of a nation. If Nike suddenly doubled or tripled wages, they say, its assembly lines would be full of doctors, teachers and bureaucrats. The repercussions would be devastating to Vietnam’s economy.

“The bottom line is that I’m competing with 80 other companies in this industrial zone for the same work force,” said Tae Kwang Vina’s president, C.T. Park, standing among stacked cartons bearing shipping labels to Tokyo; Singapore; Karachi, Pakistan; Ashdod, Israel; Laakdal, Belgium; Memphis, Tenn.; and Wilsonville, Ore.

“If we don’t offer competitive wages and a good work environment and benefits--we’ve built a kindergarten, we run night classes for workers who want to continue their education--our workers are going to walk across the street to other jobs,” Park said. “If that happens, I’m out of business, because machines don’t make our footwear. People do.”