My theory is that local stories are constantly deconstructing the official legends. Nike, as a storytelling organization, resorts to spinning dis-information, distortion, and diversion stories, constructed to mimic rigorous, empirical, and valid Academy-science. A Nike-sponsored Amos Tuck study suggests Nike workers can set aside almost half their income, as does the average worker in their Vietnamese study. My reanalysis of this Tuck empiricist wage-tale tells a different story: Nike workers in Vietnam are not only not saving, they are starving. Spin control?

Introduction

Nike's founder, Philip H. Knight, owns Nike stock valued at $4.5 billion. Yet the CBS news program 48 Hours (October 17, 1996) showed women and children working at Nike shoe manufacturing plants in Vietnam, making 20 cents an hour, in unhealthy environments that reeked of glue (See http://www.usvetdsp.com/usvet/story24.htm). Michael Jordan's $20 million contract is more money than Nike pays all its Vietnam labor. On March 20^th, Mr. Thuyen Nguyen, an investment banker of Vietnam Labor Watch released a qualitative study (see http://www.saigon.com/nike/reports/report1.html):

• About 35,000 workers at five Vietnamese plants - more than 90 percent of them young women - put in 12-hour days making Nike shoes. Though labor costs amount to less than $2 a pair, the shoes retail for up to $180 in the United States. The Vietnamese workers earn $2.40 a day - only slightly more than the $2 or so it costs to buy three meals a day. It is a common occurrence to have several workers faint from exhaustion, heat and poor nutrition during their shifts beatings are common Nike clearly is not controlling its contractors, and the company has known about this for a long time workers interviewed by VLW say they are not allowed to use the bathroom more than once in an 8-hour shift and are allowed to drink water only twice per shift. Both the water and the bathrooms are controlled by card or hat systems -- workers must request the card or hat from their supervisor before they are allowed to use the facilities. The VLW report notes that the number of cards or hats are limited to 3 cards for 78-person assembly line and 4 cards for a 300-person line. Violating this rule three times can result in dismissal. (VLW report).

• An internal Nike memo (released by Justice: Do It Nike! in Portland) showed top executives strategizing how to diminish the effect of the international Nike mobilization. During the weeks prior to the 18^th [date for the worldwide boycott], Nike had public relations teams holding press conferences across the country, conference calls with college newspaper editors and with writers and editors for municipal newspapers, full-page ads in college newspapers, handed out "Informed Consumer Updates" at football games(this was confirmed by a highly-placed confidential source within Nike), ...[and] is especially concerned about students... protesting contracts between their universities' athletics departments and Nike [parentheses theirs, brackets mine].

• With great fanfare, Nike released in summary from a wage-and­needs study of Nike workers in Indonesia and Vietnam. According to the study, Nike workers are so well paid that they are buying telephones, VCRs and motorbikes and still have money left over to send home to family members. .. (Campaign for Labor Rights, October 23, 1997).

Analysis. The Tuck report asserts that non-Nike community wage earners are saving between 47% and 49% of their income, so Nike workers at two sites (VS & VJ) can do the same (Tuck, p. 22). In another chart, Tuck makes it seem that Nike (subcontract) workers in Vietnam are able to save as much as 44% of their $46.35 a month wages as discretionary income (September 3, p. 16). My research question became: why did the VLW study not match the Tuck findings? Why, after interviewing 35 Nike workers, did VLW conclude they were losing weight and had to write home for money? (Tuck study is at www.nikeworkers.com/dartmouth/tblcontents.html).

In my own analysis, I used data from the Tuck appendix, cleaned up errors, and made what I think are more reasonable calculation procedures. My "new" results agree with the VLM study. Nike wages are low. Tables One and Two compare Tuck (p. 16 and p. 20) spending profile displays in the first two columns with my new calculations in the last two columns. Mine are more valid and reliable (see end notes for calculation details).

How does Tuck construct a story so different from VLM's and mine? In Table One, Tuck compares workers in two factories (VS & VJ) to its sample of 300 adults living in 146 households around the factories.⁽¹⁾ It is not measuring Nike worker's budgets, only their wage. The budget expense items come from a survey of non-Nike households. For example, for food costs they use a median per household member figure from a community survey (i.e. $12.93 & $15.52 with children and old folks averaged in), instead of the per wage earner figure ($25.86 in both) I selected (from p. 29 of their appendix).

These and other Tuck data-adjustments, grossly distort results. And there are method problems with surveying only main streets and adjacent alley ways, and for the VJ sample, ignoring single person households. And why not interview the workers themselves instead of a contrived sample of non-Nike wage earners? The result is that according to the VLW study, workers need $2.10 a day to live. But by Tuck's calculations, workers ought to be able to eat on less than 50 cents a day. This is a 400% discrepancy.

Table One: "[Does] a Typical Individual Spending Profile Indicate that VS and VJ Minimum Wages are Sufficient to Allow for Savings[?]" [Title Additions mine].

Table Two: "However, [Does] Average VS and VJ Wages [for two] Better Match Household Expenditure Levels[?]" [Title additions mine].

From Table One, I conclude that Nike (VS & VJ) wages are no match for the household expenditure levels in the vicinity of these Nike factories. In Table Two, Tuck finds that the median household size in the community is four persons with two income earners. But there are rounding and other errors and misrepresentations, which spin out a story of VS workers only losing $5.69, while VJ workers retain of $8.62. After cleaning up the error, the more realistic figures are a loss of $26.91 and $4.04, respectively. Therefore, even using the more conservative Tuck spending profiles of Table Two, the recalculations show findings that are grossly different.

In Table two, Tuck uses the wage earner food value, which I employed in Table One, but this time treats Housing/Rent costs as zero, by claiming the "vast majority of residents own their own homes" (p. 21). But, in the appendix to the Tuck report, they show families in the area have median housing/rent expenses of $15.09 & $3.45 for VS and VJ respectively. I include local housing costs in the budget, because to exclude them restricts workers to Nike's dorm housing. In dorms at P. T. Nikomas, a manufacturer of Nike shoes: "Each room holds a dozen people. Each room has six bunk beds, packed in so closely there is no room to walk or even stand in the room." Source: http://www.socialequality.com/public_html/iwb5-5/nike.htm. Social insurance expenses, health care expenses, and utilities costs are misrepresented and understated. Tuck's procedure treats wood and cooking fuel as mutually exclusive items, when in fact families may use both sources in varying amounts. If the tables were recalculated using means instead of medians, then workers in Table Two, on average, a two Nike wage-earner family would be losing -$55.84 and -$34.15 at VS & VJ, respectively. The use of the median statistic, while common in this type of study, favors Nike by understating income and expense distributions in the area. It may also be a misrepresentation to only sample on the main streets and alley-ways, where wages may be much lower.

Recommendations. Nike needs to pay a fair living wage, contract impartial (not me and not Tuck) researchers, study worker budgets and eating patterns. I concur with VLW, Nike can work with Vietnamese experts in shoe manufacturing who make Reebok, Fila, and other high-quality shoes with better working conditions, and conduct an environmental impact audit.

2. Tuck Error & Misrepresentation of Food Expenditure - 150 & 180 in chart, but median household member is 120 & 150. Misrepresentation is using a per household member statistic instead of the per wage earner median of 300 & 300, respectively (in thousands). In dollars, their figure would be $12.93 & $15.52 for VS and VJ. This is about one-fourth amount of food expenditure in the VLW study. 

3. Tuck Misrepresentation of Housing Costs - They use cost of Dorm, which would restrict worker choice to only dorm housing, when in their report they stress the importance of the family living situation in Vietnam. 

4. Tuck Misrepresentation - Tuck does not allow for any transportation costs, which would restrict workers to not leaving the factory, except on bicycle. For VJ factory, where most workers are from other areas, it would mean no budget to visit families. 

5. Tuck Misrepresentation of Health Care Costs - they assume that the 5,000 mandatory medical deduction is adequate to cover worker health care costs. Procedure is questionable because it invalidates comparison to what local household members spend on health care, which is the point of doing their comparative study. 

6. Tuck Misrepresentation of Education Cost - Their procedure (p. 17) disallows any education costs for single workers. This procedure would not allow workers to save for their future education, & once again invalidates comparison to what local Vietnamese citizens are investing in their education. 

7. Misrepresentation of Phone Costs - Tuck procedure is to allow each workers a four-phone-call budget. This is a misrepresentation because it under-represents a comparison to what local Vietnamese citizens spend on their phone calls. For VS it is less than half what is spent in local family living situations. 

8. Misrepresentation of Entertainment - Tuck procedure is to not allow workers an entertainment expense. This is a misrepresentation of their comparison to local living situations & it is questionable because it changes the definition of a "nonessential" expense by disallowing all entertainment. 

9. Misrepresents Housing/Rent by stating "vast majority of residents own their own homes" (p. 21), but their own survey reports that families in the area have median housing/rent expenses of 175,000 & 40,00 for VS & VJ areas, respectively. 

10. Differences between Tuck & New Clothing/Footwear entries is due to Tuck rounding to nearest thousandths. 

11. Misrepresentation & Error of Utilities Costs - Tuck procedure is to treat wood & cooking fuel as mutually exclusive. This does not allow that families may in fact use both sources in varying amounts. There is also an error using their method (50,000 + 45,000 should equal 110,000, not 102,000 for VS. And, for VJ (45,000 + 45,300) without rounding equals 90,300. 

12. Misrepresents Health Care Costs - By excluding social insurance expenses as indicated on their page 37. 

13. Difference in VS education figures due to Tuck's use of rounding to nearest thousandths.