Next Stop on Corporate Low Road: Vietnam

The young woman before me was supposedly one of the lucky ones in Vietnam, because she works in a foreign-investment factory. We’ll call her Tuyet. Why then did she break down in tears when the talk turned to wages?

She was one of about a dozen Nike workers I spoke to throughout Vietnam while conducting research last December for a comparison of export-driven economies.

Tuyet was a “team leader” and has made Nike shoes since a South Korean contract-supplier set up shop there in 1995. She suffered through 10 years when the official minimum wage was stuck at $42 a month.

A strike wave two years ago pushed the monthly wage up to $55, but the rate of inflation has risen considerably this year, and now approaches 13 percent. Her child’s kindergarten fee eats up almost half of her take-home pay.

WILDCAT WAVE

Vietnamese workers have launched hundreds if not thousands of wildcat strikes in recent years, mostly in factories backed by foreign investors, where wage cheating and abusive treatment is rampant. Many of these wildcats are one-off events, and often lead to the firings of organizers. Blacklists don’t appear to be maintained.

But the government of the one-party state is desperate to check the cascading worker activity. It issued a decree in January that forces participants in “illegal strikes” to repay their employer up to three months’ wages.

Factory-level unions must join the country’s labor federation, which acts as an arm of the government. Union officers are chosen by management, according to workers, and are not willing to defend workers’ interests.

It doesn’t pay to defend them. Human Rights Watch reports that independent union activists are commonly detained, interrogated, and harassed. The day I arrived in Vietnam, four workers agitating for an independent union, the United Workers and Farmers Organization, were handed stiff prison sentences.

Vietnam is fast becoming the locale of choice for multinational manufacturers chasing the lowest-cost production, as the elimination of tax breaks and tentative steps toward labor-law reform in China have driven costs too high for their taste.
Companies in Vietnam are divided between “private” (local investment) and “joint-stock” (where the government retains large ownership stakes alongside private investors and workers). Managers at both complain about the big brands’ predatory buying practices. Corporations pit suppliers against each other, pushing the prices paid to rock bottom.

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“Certification”—touted as the fix for the sweatshop problem—did not surface often in discussions with workers or managers. It used to be a government fixation, however, testified to by seals of approval from Social Accountability International adorning factory entrances and apparel hang-tags.

THE MORE THINGS CHANGE

A barrage of horror stories in the 1990s about young women around the world sewing garments in 19th century conditions led corporations to develop the inspections and certifications of “corporate social responsibility” to reassure queasy Western consumers. Nike—which said 200,000 people made its products in Vietnam last year—is the classic case, having switched after years of caustic criticism from first-rank sweatshop denier to committed backer of factory inspection programs.

But what would Tuyet say? She would say the really important things get overlooked in the checklist of a hundred-plus questions for a Nike-supplier factory audit. Such as the half-dozen workers who were fired for protesting forced Sunday overtime in January. Six-day weeks are normal.

If Nike did not know the protest leaders were dismissed, it is certain that company officials would not know that they also spent the night in jail. Tuyet would also mention that Vietnamese managers are now fondling young women, 90 percent of whom are just-off-the-bus migrants from poor villages. It used to be only the foreign bosses.

Managers used to have translators in each department, Tuyet said, to act as a buffer between hot-tempered foreign managers and Vietnamese workers. Cost-cutting in 2005 eliminated this minimal measure.

Now managers must send “upstairs” for a bilingual staff person. But they usually just stand over the women and curse, injecting any local swear words they may have picked up.

Tuyet’s co-worker, a maintenance mechanic with more than six years’ service, jumped in at this point to say intimidation and menacing practices are common. The union at the factory is dysfunctional, he said, even though workers have no choice but to pay dues.

Nike’s focus, however, is elsewhere. The company sent a gaggle of U.S. university athletic directors to Vietnam in February to show off the “compliance regimen” that the shoe giant spends millions of dollars on every month. So why did it take me only about seven hours to unearth serious problems?

Jeff Ballinger, a former Solidarity Center staffer in Indonesia, is teaching industrial relations at Webster University in Vienna.