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Adidas, Nike Accused of Paying Garment Workers “Poverty Wages” Ahead of World Cup

Fair play in the sporting-goods supply chain? Not quite, according to a new report released ahead of the FIFA World Cup in Moscow on Thursday.

Published by Éthique sur l’étiquette (French for “Ethics on the Label”), a member of the labor-rights consortium Clean Clothes Campaign, “Foul Play: Sponsors Leave Workers on the Sidelines” accuses Adidas, Nike and other football sponsors of paying the thousands of workers who sew their shirts and shoes “poverty wages” they can scarcely subsist on. 

But even as even as budgets for marketing and sponsorship have doubled over the past decade—Adidas and Nike are outfitting 22 of the 32 World Cup teams this year—the working conditions of garment factory workers remain “just as precarious as ever,” Éthique sur l’étiquette said in the report.

Take the price of a pair of Nike or Adidas trainers, for example. Between 1995 and 2017, the workers’ share of the cost has fallen by 30 percent, the report said. 

In Cambodia, Indonesia and Vietnam, where the sportswear giants have migrated most of their sourcing, workers’ salaries are 45 percent to 65 percent below the living wage—which is to say “largely insufficient for workers to meet their families’ basic needs,” it added.

In Indonesia, where 80 percent of factory employees are women, garment workers earn between 82 and 200 euros ($96 and $235) per month, the report noted. 

“Their wages often do not even cover basic needs, and is much less than would enable them and their families to have decent lives, which according to calculations by Asia Floor Wage would amount to 363 euros ($426),” Éthique sur l’étiquette said in a statement.

Adidas and Nike could have maintained their sponsorship contracts at the 2012 levels instead of increasing them to “unprecedented levels,” the group added.

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“They would have saved enough money  to cover living wages for the workers in their main production countries China, Vietnam, Indonesia and Cambodia,” said Éthique sur l’étiquette. “Instead, these brands decided to spend their money on football players rather than the workers stitching their shirts and shoes.”

Both brands, the organization said, could start making amends in Indonesia, where a Freedom of Association protocol, signed in 2011 by Adidas, Nike, Asics, New Balance and Puma, has largely stalled, despite agreements to begin negotiations over wages and precarious employment.

Éthique sur l’étiquette and Clean Clothes Campaign, along with the Indonesian unions, are urging Adidas and Nike to remember their promises to address those two issues, as well as work toward a similar agreement to ensure that all the workers in their supply chain in Indonesia receive a fair living wage.

While Adidas and Nike have succeeded in developing a highly efficient business model that has generated “substantial profits” over the past decade, labor-rights activists say, only the shareholders appear to be reaping the benefits, not the workers downstream.

“This is not a matter of insufficient financial means but rather one of priority,” said Éthique sur l’étiquette. “Nike and Adidas generate enough revenue to be able to pay living wages across their supply chains.”