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Nike Raises Wages in Indonesia

October 16, 1998

BEAVERTON, Ore. (AP) _ Nike Inc. has announced a 25 percent minimum wage increase for its factory workers in Indonesia, responding to the Asian financial crisis and critics of its labor practices.

The monthly minimum rises to 250,000 rupiah _ about $23 _ from the previous government-mandated monthly minimum of 200,000 rupiah, or $18.

``We surveyed the workers about how much a basket of goods costs, what their money buys now, and determined the financial crisis was hitting them harder than in other parts of Asia,″ Nike spokesman Vada Manager said Thursday.

About 30 percent of Nike’s 70,000 contract workers in Indonesia are paid the minimum wage, Manager said, adding that 20 percent earn in the 300,000-rupiah range.

At last month’s shareholders’ meeting, where the company came under criticism for low factory pay, vice president for corporate responsibility Maria Eitel said Indonesian pay would be raised above the 15 percent minimum wage increase set by the government last spring.

The move by the $9.6 billion-a-year company follows one earlier this month by competitor Reebok International, which increased its Indonesian wage 20 percent over the government minimum.

``This is great progress. Just a year ago, the subcontractors were not even paying minimum wage,″ said Medea Benjamin, spokeswoman for the San Francisco-based human rights group Global Exchange.

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