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Nike raising overseas wages
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March 23, 1999: 12:45 p.m. ET
Entry-level workers in Indonesia to get increase of $1.70 a month
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NEW YORK (CNNfn) - In a move intended to appease critics and improve working conditions at its overseas plants, Nike Inc. raised entry-level cash wages by $1.70 a month for its Indonesian workers Tuesday.
The Beaverton, Ore.-based athletic footwear company said entry-level salaries will go from 250,000 rupiahs (Rp) to 265,000 Rp a month.
Nike officials said the increase will raise the minimum monthly compensation package -- which includes bonuses, housing, health care, transportation and meal allowances -- to 332,000 Rp per worker, or approximately $37.14.
The wage increase affects only entry-level workers, or roughly 25 percent of Nike's 70,000 member Indonesian workforce.
Nike spokesman Vada Manager said the remaining workers make on average approximately 400,000 Rp, or $45, a month.
"We continue to look at those wages as well," said Manager, who noted the company also is implementing quarterly reviews of wages, inflation rates and currency exchange rates for countries where it operates.
"But the concern was pushing ahead with the entry-level workers," he said. "There was some concern that 250,000 rupiahs was not meeting their basic needs."
Nike's announcement comes at a time when Indonesian government officials are expressing serious concerns about the lingering effects of the Asian financial crisis on their country.
Nike's new pay standards take effect April 1, the same day Indonesia mandated companies raise their minimum wage to 231,000 Rp a month to help meet the basic needs of workers.
Manager said Nike developed its new pay scale in conjunction with labor rights organizations like Global Exchange, a San Francisco-based organization that has harshly criticized Nike's overseas working conditions.
A Global Exchange spokesman wasn't immediately available to comment on Nike's announcement.
The wage increases come just days after Nike announced it had earned $124 million, or 44 cents a diluted share, during its fiscal third quarter, trouncing Wall Street's estimates by 6 cents a share.
Still, Wall Street found little joy in Tuesday's announcement. In late morning trading, the firm's stock was down 3 1/16 to 55 13/16. 
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Nike Inc.
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