Globalization and Its Shadow — Factories and Labor

At some point, the sneaker had quietly transformed from something you wore into something you longed for. Top athletes leaped across television screens, swooshes and three stripes filled the streets, and a single pair of shoes became a banner of self-expression.

But the brighter that light grew, the deeper the shadow fell over a place no one usually cared to look. Who, exactly, was sewing those shoes, where, and under what conditions? In the 1990s, the world was forced to confront that question.

The shoes were no longer made in their own country

Trace the story back, and the answer lies buried in the very origins of the big three.

Nike’s predecessor, Blue Ribbon Sports, was originally a company that imported and sold Japanese-made Onitsuka shoes. Even after launching its own brand, Nike rigorously pursued a nimble model: hold no factories of its own, concentrate on design and marketing, and entrust manufacturing to outside partner factories. Founder Phil Knight’s memoir ‘Shoe Dog’ tells precisely the story of a company that accelerated its growth by pushing production outside its own walls.

In time, the center of production moved from Japan to lower-wage South Korea and Taiwan, and then to China, Indonesia, and Vietnam. Adidas and PUMA likewise scaled back their own production in Germany and Europe and shifted their manufacturing bases to Asia. What the big three shared was a single structure: keep the brand at home, and leave the sweat-soaked work of making the shoes to contractors.

What consumers saw were the star athletes shining inside the television commercials. The faces of the people who actually sewed those shoes were never printed anywhere on the box.

In 1991, a single report lit the fire

The turning point is said to be 1991. Labor activist Jeff Ballinger published a report exposing the low wages and harsh working conditions at a Nike contract factory in Indonesia.

What it revealed startled people. Indonesian workers were paid less than one dollar a day, and workers at one subcontracting factory reportedly earned just over ten cents an hour. In China and Vietnam too, reports mounted of people forced to work long hours for wages out of step with the local standard of living.

That the criticism turned especially toward Nike was, ironically, because Nike was the most successful and the most visible of all. At the feet of the brand that had thrilled the world with ‘Just Do It,’ a dark question was thrust forward. At the 1992 Barcelona Olympics, protests against Nike were reported. The word ‘sweatshop’ began to cling to the glamorous world of sporting goods.

What matters here is that, though it began as the problem of a single company, Nike, it gradually widened into a question for the entire industry — because the big three all shared the very same blueprint of outsourced production.

The wall of “it’s not our responsibility”

In response to the criticism, the brands’ initial reaction was said to be slow.

Nike at first took the position, as reported, that production was entrusted to independent contractors and that the labor conditions at those factories fell outside the scope of its own responsibility. Legally, it was one line of logic. But public opinion would not accept it. If anything, the backlash — “you make this much money, yet take no responsibility for the people making your shoes?” — only poured oil on the fire.

The criticism turned into concrete action. Picketing in front of Nike stores, boycotts, and protests on university campuses. Students asked whether the goods bearing their own university’s name had been made with exploited labor, and several universities were reported to have moved to review their contracts with the brand.

The day an executive bowed his head

The tide is said to have turned in May 1998.

Nike’s CEO at the time, Phil Knight, was reported to have spoken harsh words in public, to the effect that the Nike product had become synonymous with slave wages, forced overtime, and arbitrary abuse. The sight of an executive holding his own product at such a distance drew enormous attention.

At that point, Nike rolled out measures to improve labor conditions at its contract factories — expanding educational programs for workers, raising the minimum age, and strengthening standards for managing hazardous substances.

The industry-wide framework moved as well. Building on a task force created under U.S. President Clinton, a mechanism bringing together companies and labor and human-rights groups was put in place, and in 1999 the Fair Labor Association (FLA) is said to have been founded. It was an attempt to continuously check factory conditions through independent monitoring and a code of conduct.

That said, this did not settle everything. Over Nike’s labor problems, a lawsuit was filed (the Nike v. Kasky case) hinging on whether the company’s statements had misled consumers, and it was reported to have been resolved by settlement in 2003. Criticism and improvement, and then new questions again — that back-and-forth continued thereafter.

What did the brands that saw the shadow learn?

Let us lay out the timeline here — the flow from how production moved to Asia amid globalization, to how criticism erupted, to how the brands turned their helm toward social responsibility.

What this chapter has told is not a story meant to condemn any single company. For all of the big three, who shared the same blueprint of outsourced production, this was a trial that could not be avoided. PUMA and Adidas, too, are said to have each established codes of conduct and pressed ahead with efforts to inspect the conditions of their supply chains.

The history of the sneaker is often told as a story of glamorous advertising and stars. But so long as those shoes are sewn by hands all over the world, the value of a brand cannot be separated from the reality of the factory. The trial of the 1990s carved that truth into the industry.

The strength of the light is also the depth of the shadow. When the big three saw it, the sneaker wars changed their meaning — from a mere contest of sales into a battle in which “how you make it, and how you face it” was the question.

And so the story arrives, at last, at the present. How will the big three live their next hundred years?