Nike says its factory workers earn nearly twice the minimum wage. In Indonesia, workers say: “That’s not true.”

Despite boom times and, more recently, slumping sales, Nike Inc. has stuck to one key assertion about its foreign suppliers: They pay the average factory worker about twice the local minimum wage.

It’s a claim that Phil Knight, the company’s co-founder, first made in the 1990s, when the company was accused of sweatshop conditions in overseas factories hired to make Nike clothing. And it’s the one that the sneaker giant has been reaffirming since 2021.

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

When a reporter from The Oregonian/OregonLive visited the country and interviewed about 100 workers at more than 10 factories that supply Nike, none reported making nearly twice the minimum wage.

“This is bullshit,” a union official said in English, 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 manager declined to be named for fear of reprisals, including fines and termination.)

A factory worker in West Java asked a reporter where on the company’s website Nike claims his salary.

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

“Nike doesn’t pay double the minimum wage,” said a union official in Central Java, a low-wage area where Nike contract factories have expanded. “The fact is the opposite. Nike is looking for cheaper workers.”

Last year, a ProPublica reporter traveled to Cambodia and found that only 1% of 3,720 workers at a former Nike supplier, he earned at least 1.9 times the minimum wage, based on the factory’s payroll. Interviews and other workers’ pay stubs corroborated that earnings are generally closer to minimum wage than double that amount.

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

All workers surveyed said they earned about minimum wage, which is as little as $150 a month in some parts of the country.

Sandra Cho, who oversees human rights at Nike, did not dispute the fact that some factory workers – notably in Indonesia and Cambodia – earn less than 1.9 times the minimum wage, calling the figure a “global average”.

“Some countries will be lower than 1.9, others higher,” she said.

In Vietnam, Nike’s largest production hub, two workers told The Oregonian/OregonLive they made minimum wage — about $204 a month — but two of them said they made double that. This lines up with reports from Nike competitor Puma, which says its largest factories in Vietnam pay around double the minimum wage.

Nike responded when asked if it was misleading to highlight the figure of 1.9 times the minimum wage.

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

But the transparency offered by Nike is limited.

The company’s global wages figure is based on data from 700,000 of its approximately 1.2 million workers at its nearly 700 contract factories. In other words, almost half a million workers are left out of the calculations. Nike does not reveal which factories or workers are excluded. The data is said to cover its largest partners, which account for a considerable share of production.

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

Nike’s competitors, Adidas and Puma, also produce wage estimates for only a subset of their suppliers, but they have released national-level data in recent years. Adidas reports wage variations within countries. Advocates say the data helps workers determine whether they are being paid fairly and push for pay increases if they are not.

Nike said that focusing solely on wages relative to minimum wage was a mistake.

The company’s main concern when it comes to salaries is whether they are high enough to cover basic expenses and a little more, Cho said, a concept known as a living wage. Some countries have a minimum wage that meets this threshold, others do not. Nike said that 66% of its supplier workers, at least those for which the company has data, earn a living wage. This represents an increase from 53% in 2021.

But living wage calculations can vary widely and don’t always match the perceptions of people on the ground. Workers interviewed near Jakarta, where the local minimum wage is apparently higher than the living wage, said it was not enough to live on.

One said she wakes up seven days a week, before sunrise, to open a small shop in front of her house.

It sells groceries, gas canisters for cooking, water, cigarettes and snacks, mainly to housewives who purchase basic necessities.

She opens the store around 6 a.m.

Half an hour later, on a weekday, she leaves to work at the factory. Over the next eight hours, while her husband tends the store, she works on her feet, often in sweltering conditions, cutting fabric for 1,600 pairs of Nike sneakers, or one every 18 seconds.

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

She makes about $300 a month making sneakers, 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 put up with it to meet my needs and those of my child.”

A story of dueling numbers

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

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

“Low Japanese labor costs allow an exciting new company to offer these shoes at the very 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 witnessed while traveling around the world at the age of 24. Knight, who did not respond to detailed questions for this article, wrote in the book that hiring low-wage workers in developing countries would boost economic development.

The first decades of Nike’s history reinforced this belief. As the Japanese economy boomed and wages rose, Nike shifted production from Japan to Korea and Taiwan and, later, to Indonesia and Vietnam.

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

When Nike arrived in Indonesia in 1988, the country offered a tempting economic carrot to companies seeking overseas factories: a minimum wage of about $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 targeted by militants because of its history of human rights violations.

As companies increased production there, protests against sweatshops and negative press reports increased, with some pointing out that the country’s minimum wage was so low that many factory workers suffered from malnutrition.

Many of the stories targeted Nike, whose runaway success, coupled with its popular sports fans and aloofness as a company, made it a rich target.

The first cover included a memorable 1992 article in Harper’s Magazine which showed the salary of an Indonesian factory worker who earned $1.03 per day at the time and concluded that she would need to work more than 44,000 years to match Nike endorser Michael Jordan’s annual income.

Knight and Nike have pushed back against the criticism. Where Knight once sang the praises of low wages, he and the company now boast that the company’s suppliers are paid generously.

In 1996, Nike distributed a fact sheet indicating that the median wage in its Indonesian factories was $108.65 per month, more than twice the minimum wage. In June of the same year, Knight wrote a letter to the editor of the New York Times saying Nike “paid an average of twice the minimum wage” to factory workers. A month later, he told CNN that Nike was paying “more than two times » the minimum wage in Indonesia. He told shareholders in 1996 that the salary was “double the minimum wage throughout Indonesia”.

THE Associated Pressthe Wall Street Journal, Time Magazine and the editorial board of The Oregonian, the largest newspaper in Nike’s home state, have all reiterated this claim.

But The Oregonian/OregonLive and ProPublica found no contemporary data supporting Nike’s claim. Neither does Nike.

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

The Oregonian/OregonLive and ProPublica found numerous reasons to dispute this claim, including statements from the company itself. In fact, between 1994 and 2001, four reports released directly by Nike, written at the company’s request or compiled by the U.S. government, never placed the average wage in Indonesia more than 37 percent above the minimum.

When asked to address the conflicting numbers from the 1990s, Nike said via email: “What is relevant today is how Nike currently operates, including the rigor of our current disclosures, the progress we have made, and the work we still need to do to advance wages and opportunities throughout our supply chain.” »

The accuracy of Nike’s past wage claims has not gone unchallenged.

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

He submitted a stack 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 that any of its statements were inaccurate, that those statements were not subject to a court’s opinion as to their truth. The company’s comments were protected by the First Amendment, Nike wrote, because they were not intended to sell Nike products but to respond to Nike’s criticisms regarding “matters of public concern.”

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

Take a second job

Since Kasky’s deal, Nike has released nearly 2,000 pages of reports on its efforts to become a better corporate citizen. The closest we’ve come to new light on wages came in 2021, when the company reported new efforts to understand what factory workers earn.

The 184-page report says workers receive “an average gross salary of 1.9 times the minimum wage” – a claim almost identical to the claim the company made in the 1990s.

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

Nike reiterates this claim in a disclosure currently published on its websitewhich has been updated with 2022 data. It now draws on data from 111 factories.

Indonesian workers reported significant deviations from the company-reported average wage for the entire supply chain.

Workers’ accounts of earning minimum wage or slightly more are consistent with 63 pay stubs from three Indonesian factories, which The Oregonian/OregonLive and ProPublica obtained from a group of workers. In two factories, workers earned on average 1.1 times the minimum wage. In the other factory, workers earned on average 1.4 times the minimum.

These figures are consistent with revelations from Adidas and Puma, which have published more information on factory wages than Nike.

In his Annual report 2024Adidas said nearly 100,000 of its factory workers in Indonesia earned between 1.1 and 1.4 times the minimum wage. Puma data Sustainable development report 2024 reported that workers at four Indonesian suppliers earned an average of $208 a month, 17 percent more than the average minimum wage where the factories were located.

Facing detailed questions about wage practices, Nike said that looking at wages relative to the minimum in isolation “disregards real wage growth and economic development” in countries where Nike sources its products.

In Vietnam, Nike 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 are proud of the role that Nike and our industry have played in creating jobs, skills and opportunities in many countries, including today in Vietnam, where the industry contributes significantly to the national GDP,” the company said, adding that it remained “committed to pushing for continuous improvement.”

Nike’s Cho said the company’s work to raise wages includes a program that has helped female workers move into higher-paying positions. About 80 percent of factory employees are women, Cho said, but men are 2.5 times more likely to be promoted off the manufacturing line. She said 21 percent of program participants received a promotion within three months.

The company said what matters more than what people receive compared to minimum wage is whether they earn enough to cover basic expenses. Some regions in Indonesia, including Jakarta, have a minimum wage higher than local living wage estimates established by the WageIndicator Foundation, an independent Dutch non-profit organization.

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

But an income that corresponds on paper to the living wage is not always what workers say they need, at least in Indonesia.

Standing in an overgrown field outside Jakarta, 30 workers burst into laughter when asked if they were paid enough to cover basic expenses.

One said factory wages were not enough to pay for new uniforms, books and shoes for school-age children.

Another worker estimated that up to 70 percent of her colleagues had second jobs, a comment that earned her nods of approval. This work includes operating motorcycle taxis, fish farming, collecting scrap metal and cleaning fruit, the workers said. Some workers sell goods inside the factory, including coffee, snacks and cosmetics, which they say carries the risk of disciplinary action or even dismissal.

Knight once told documentarian Michael Moore that factory jobs were such a path to upward mobility that someone working in an Indonesian factory making Nike products could one day become Moore’s owner.

Two workers who invited a journalist to their home last summer in a neighborhood near Jakarta were not homeowners.

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

Workers largely agree that Nike contract factories are preferable to local alternatives. Nike factories are clean and pay on time, they said. Many are equipped with exhaust fans that can relieve tropical heat. Forced overtime is no longer a problem. Government regulations tend to be followed.

But workers said wages remained chronically low, describing the typical wage as enough to support a single person.

“It’s like the company wants us to stay single forever,” said one worker near Jakarta.

Another worker said she started sewing Nike sneakers 25 years ago, around the time Knight was talking to Moore about workers becoming owners.

She said that after all these years, she earns $300 a month, about the local minimum wage.