Nike Vietnam Plant In Walkout Over Pay

Sportswear giant Nike is today facing potentially embarrassing employee and public relations issues following a walkout at one of its manufacturing outsourcing factories in Vietnam over rising inflation beyond pay increases, adding further bad blood to the company’s perceived negative image of exploitation and sweat shop labour.

The 14,000 strong work force of the manufacturing plant in Dong Nai, Vietnam has today decided to strike over the lack of pay rises to correspond with inflation, which employee representatives say is resulting in devaluation of their labours.

After falling under criticism for working conditions and rates of pay of its third world employees in the past, Nike has been quick to improve standards and salaries across its own factories, whilst demanding changes at those to which it outsources production.

However with rampant inflation throughout the Vietnamese economy, workers are finding it hard to keep up with the rising cost of living despite their comparatively well paid jobs in manufacturing for the global sports brand. The Vietnamese government has also announced that it is to increase the minimum wage by 12% in January, thus it is expected that Nike may eventually be forced to raise wage rates anyway in order to keep up with economic fluctuations.

With the average wage at the factory 20% higher than national minimum levels until now, it remains to be seen whether Nike will be willing to justify further pay increases at the factory responsible for around 10% of its overall shoe production business.

Additionally, with the growing possibility of cheap labour elsewhere, in less developed economies, it remains to be seen whether Nike will shift its manufacturing operations if labour costs in the region continue to mount over the coming years.

Story link: Nike Vietnam Plant In Walkout Over Pay