Nike caught in lie as it brags about factory work conditions

They are lines in the payroll ledger of a Cambodian baby clothing factory, invisible lives near the bottom of the global economy.

There is Phan Oem, 53, who says she clocked up to 76 hours a week producing clothing for Nike and other American brands, sometimes forced to work seven days a week. She says she feared being fired if she didn’t work through lunch breaks, on holidays and occasionally overnight. After 12 years spent packaging clothes, her base pay was the minimum wage: $204 a month.

There is Vat Vannak, 40, who at six months pregnant traveled by bus to join hundreds of workers who protested in the streets last year after Nike pulled out and the factory went bankrupt, leaving them unpaid. The authoritarian Cambodian government warned them to stop.

And there is the medical worker who said she saw one or two factory employees a month being sent to the hospital after falling unconscious. She said they were among eight to 10 workers a month who became too weak to work. Three other former employees said they sometimes saw two to three people go to the clinic for these issues in a single day. The reason, the medical worker said, was that they didn’t sleep much, didn’t eat enough and worked long hours.

Nike’s manufacturing apparatus in Southeast Asia has been shaken in recent weeks by news about President Donald Trump’s tariffs. Cambodia and Vietnam, mainstays of Nike’s supply chain, have faced import taxes of 49% and 46%, among the highest of any nation. Nike shares have been hammered.

The stories of workers at Cambodia’s Y&W Garment illuminate the longer-term legacy of Nike’s push into the region more than two decades ago, when labor abuses led co-founder Phil Knight to acknowledge that Nike products had become synonymous with “slave wages, forced overtime and arbitrary abuse.” The former employees’ recent experiences cast doubt on the company’s commitment to reform.

Unless tariffs force Nike to return manufacturing to the United States, labor advocates say, the company will have to offset the higher import taxes either by raising prices on its apparel or by pressuring its foreign factories for greater productivity, squeezing workers and their wages.

Nike has prided itself on the story of its reinvention since the 1990s sweatshop scandal. “We’ve gone from a target of reformers to a dominant player in the factory reform movement,” Knight wrote in his 2016 memoir, “Shoe Dog.”

The company has worked to convince consumers that it is improving the lives of its factory workers, not exploiting them. It became the first major apparel brand to disclose the names and locations of its suppliers. It established a written code that requires its suppliers to create a safe, healthy workplace, prohibit forced overtime and honor workers’ right to form unions. The company reports annually about its progress. In Nike’s marketing materials, contract factory workers are often smiling.

A key tentpole of Nike’s claims is that its suppliers pay competitive wages. Nike says contract factory workers for whom it has data now earn an average of 1.9 times their local minimum wage, without counting overtime.

Scrutinizing that claim is extraordinarily difficult. Nike acknowledges that the analysis omits more than a third of the 1.1 million people who make its sneakers and apparel worldwide. Nike says its focus in collecting wage data has been on its biggest suppliers. It hasn’t said which of its 37 producing countries are included.

ProPublica obtained a rare view of wages paid to the factory workers who produce Nike clothing: a highly detailed payroll list for 3,720 employees at Cambodia’s Y&W Garment. Covering earnings from longtime managers down to freshly hired 18-year-old sewing machine operators, the spreadsheet shows the workforce falling far short of the amount Nike says its factory workers typically earn.

Just 41 people, or 1% of the Y&W workforce, earned 1.9 times the local minimum wage of about $1 per hour — even when counting bonuses and incentives. These higher-paid employees included accountants, supervisors and a human resources manager.

Nike didn’t answer specific questions about ProPublica’s findings, including whether it dropped Y&W as a supplier because of any violations of its code of conduct.

In a statement, Nike said its code sets clear expectations for suppliers and that it “is committed to ethical and responsible manufacturing.”

“We build long-term relationships with our contract manufacturing suppliers,” the statement said, “because we know having trust and mutual respect supports our ability to create product more responsibly, accelerate innovation and better serve consumers.”

Nike added that it expects its suppliers “to continue making progress on fair compensation for a regular work week.”

Representatives of Y&W Garment and its Hong-Kong-based parent, Wing Luen Knitting Factory Ltd., did not respond to emails, text messages or phone calls seeking comment, and Wing Luen’s website is defunct. New York-based Haddad Brands, which Y&W workers said was an intermediary for Nike at the factory, did not respond to emailed questions about conditions at the factory and hung up on a reporter who called. Its website says it makes children’s clothing for Nike and that it enforces Nike’s code of conduct.

ProPublica interviewed 13 former Y&W workers in the Cambodian capital and surrounding villages, plus another one by phone, during two weeks in January.

In spare concrete homes and earthen courtyards that smelled of burbling fish sauce, they described workplace abuses that Nike promised to eradicate long ago. In addition to low wages, fainting workers and forced overtime, they spoke of bosses who mocked them if they underperformed and a life of debts that kept piling up.

They told ProPublica that what they made in Cambodia’s standard 48-hour, six-day week wasn’t enough to make ends meet. Some feared being fired or angering their supervisors if they refused extra hours. Others said they needed to work overtime simply to keep up. Still, many said they wished the factory hadn’t shut down.

Khun Tharo, program manager at the Center for Alliance of Labor and Human Rights, a Cambodian legal aid group also known as CENTRAL, said his country’s garment workers — including those at Y&W — do what circumstances require.

“When you ask them, ‘Do you want to have the weekend off with your family, your kids?’ yes, they do,” he said. “But how can they afford that? They’re stuck. There’s no choice.”

Nike’s arrival inside the corrugated metal walls at Y&W Garment was a big deal.

It was December 2021, workers said, when the company began trial production runs inside the expansive factory complex in southern Phnom Penh, about two miles from one of the notorious killing fields of the Khmer Rouge’s 1970s genocide.

Supervisors told ProPublica that the owner, a man they called “thaw kae” — the big boss — gave them a message to deliver to line workers: Nike was coming. Money and benefits would follow. And they wouldn’t have to work extra hours.

Workers were happy. Earning more would let them save, pay off debts and stop borrowing from friends to make it to the next month. They said they felt secure knowing that it was Nike, a company they had heard respected labor laws.

But the promise of the big American brand was never realized, according to the workers who spoke to ProPublica. “After Nike came, nothing has changed,” one worker said.

The former Y&W employees said neither their working conditions nor their pay improved while Nike goods were made at the factory. They instead described problems that would violate Nike’s code of conduct, which prohibits forced overtime and verbal abuse.

Three workers said they faced intense pressure to meet production targets. Two said workers were blamed if they missed their goals. Managers would yell at team leaders when that happened, one of them said; “If you can’t do it, just go back home,” the former worker recalled employees being told. If workers hit their targets, he said, managers set higher ones. If employees refused to work the extra hours needed to get there, two workers said, then managers would tell them their contracts wouldn’t be renewed or that they should resign.

Y&W’s payroll sheet covers March 2024, when the factory’s total employment was down from a previous high of about 4,500 people. The spreadsheet shows that even with bonuses and incentives, more than three-quarters of workers made close to Cambodia’s minimum wage — at most, 15% above it.

Workers with seniority earned only a little more. Of the 183 workers who’d been at Y&W a decade or longer, more than three-quarters had base pay, bonuses and incentives that put them, at most, 25% ahead of minimum wage.

It’s hard to know if wages at Y&W are an outlier or emblematic of Nike’s Southeast Asia supply chain; comprehensive pay records aren’t readily available for other factories. But 18 paystubs ProPublica collected at three of Nike’s other 25 Cambodian suppliers also show workers at or slightly above the minimum wage. Separately, a 2023 survey by labor advocates found similar results at two factories that supplied Nike.

The average pay at Y&W, without overtime but with bonuses and incentives included, is slightly below the $250 to $260 a month that Ken Loo, secretary general of the Textile, Apparel, Footwear and Travel Goods Association in Cambodia, estimated is standard for the industry.

Loo said wage increases must be balanced against productivity “because it will impact our competitiveness” with other garment-producing countries.

In December 2023, two years after Nike arrived at Y&W, workers said Nike pulled out. They said they were told to destroy any remaining Nike labels, a standard demand to prevent counterfeit or unauthorized products from being created. Hundreds of workers were let go.

In early 2024, around the time of the Lunar New Year, workers said, the factory owner left Phnom Penh for what many thought was a new year’s trip home to China. He didn’t return. Factory suppliers began calling in their debts, hauling away hundreds of rented sewing machines. The factory fell silent.

Workers slept in front of the factory’s locked gates to prevent the buildings from being cleared out. Hundreds marched in the streets, hoping to get the attention of the government and the brands for whom they’d produced.

Nike, in its statement, did not explain why it left Y&W. It said its suppliers have an obligation to pay severance, social security or other separation benefits. “In the event of any closure or divest, Nike works closely with the supplier to conduct a responsible exit,” the statement said.

A California-based brand that shipping records show also did business with Y&W before its closure, True Classic, did not respond to written questions.

Workers said they never heard from the brands. They said they did hear from the government, which was unhappy about their protests. Labor ministry officials called and told them to stop inciting their co-workers, threatening arrest. In March 2024, Cambodian news reports said the government seized the factory’s assets and distributed the proceeds to workers. But workers told ProPublica they received far less than they were owed.

The garment workers said they took what they could get.

It might be hard to understand how far a dollar stretches in Cambodia’s economy. The country’s current $208 monthly minimum wage — a $4 increase from last year — doesn’t sound like much to Americans. ProPublica heard from workers about why it isn’t enough for Cambodians, either.

Two women who worked at Y&W Garment and recently gave birth said they each spend $120 a month on powdered infant formula — four cans a month at $30 apiece.

Sar Kunthea, 34, who packaged clothing at Y&W, pays $282.70 a month on $12,000 she borrowed to make drainage improvements that would keep out floodwaters, which rose halfway up her home’s doors during the rainy season.

Vat Vannak, who added metal buttons to clothing, said she typically earned about $250 a month by tacking on two hours at the end of her regular, six-day-a-week 7 a.m.-to-4 p.m. shifts. The overtime pushed her workweek close to 60 hours. Her husband also brings home a paycheck from construction. But their monthly household costs included $109 for a motorbike, $50 for a room near the factory, $60 for food and about $40 for school expenses. She said she’d saved nothing.

Labor advocates have long pushed brands like Nike to pay what’s known as a living wage, calling it a basic human right. Although methods for estimating it vary, a living wage usually includes enough for food, water, housing, education, transportation, health care, energy, clothing, a phone and unforeseen expenses.

Nike does not explicitly require its factories to pay a living wage, but it says that every worker “has a right to compensation for a regular work week that is sufficient to meet workers’ basic needs and provide some discretionary income.” Nike reports that two-thirds of its key suppliers for which it was able to collect data paid above living wage benchmarks for their countries.

Estimates from the Asia Floor Wage Alliance, which represents labor unions based in Asia, put that benchmark for Cambodia at $659 a month. The WageIndicator Foundation, an independent Dutch nonprofit, puts it at $276 to $360 a month.

But Nike’s preferred estimate is just $232, based on research by the Anker Research Institute, which is part of the Global Living Wage Coalition. Nike has sponsored the institute’s work.

In a statement, the institute’s founders and one member of the wage coalition told ProPublica: “Our estimates are always fully independent. Companies have no influence over the methodology or estimates.”

Regardless of what researchers say, Ngin Nearadei says what she earned at Y&W was not enough.

Ngin, 26, worked in quality control and found herself with hefty debt payments because, like other workers, recent flooding required her to raise the floor of her house. How much would she need to earn monthly to forgo overtime? About $400, she said, maybe $500. That’s up to 30% more than what Nike says its contract workforce earns, on average, compared to the minimum wage.

Speaking in her home, Ngin disappeared for a moment and returned with two creased paystubs. One, covering roughly two weeks, showed just how much she had to work to get close to what she said she needs.

She was scheduled to work 104 hours as part of a regular schedule that runs eight hours a day, Monday through Saturday. On top of that, she added 64 hours of overtime, including eight hours on Sunday, the paystub shows.

Her total work time for the period was 168 hours, an average of roughly 11 to 12 hours a day if she worked every day. (Paychecks came twice a month; the exact pay period covered was not printed on Ngin’s document.)

When combined with her other paycheck for the month, she earned $341.65.

The workers who make Nike’s products have helped Knight, the cofounder, become one of the richest people on earth. Nike’s market capitalization was $13 billion in 1998, when Knight delivered his mea culpa about “slave wages.” Although its stock has been trading far below its 2021 peak, Nike was still worth about $80 billion as of April 21, 2025.

The company has been a cash machine. In just its last two fiscal years, Nike has returned $13.9 billion to shareholders through stock buybacks and dividends.

According to Dennis Arnold, an associate professor of human geography at the University of Amsterdam who’s studied the Cambodian garment industry, unless Nike and others choose lower profit margins for the sake of higher pay, little is likely to change for factory workers.

Governments like Cambodia’s fear that raising the minimum wage dramatically will drive away manufacturing, he said, because companies that benefit from Cambodia’s low wages must also wait longer and pay more to get garments to Western markets due to shipping costs and the country’s poor infrastructure.

“All said, it’s not the most appealing place in the world, and the government is not taking much initiative to try to change the situation for the better,” Arnold said.

So far, no brand has guaranteed its factory workers a living wage, according to the Clean Clothes Campaign, a Dutch advocacy group. H&M, the Swedish retailer, was quoted by numerous news outlets in 2013 promising that its top suppliers would pay a “fair living wage” by 2018. An analysis by the Clean Clothes Campaign in 2019 concluded that the promise was not fulfilled. (H&M did not respond to questions from ProPublica.)

Recently, H&M and 11 other brands made a smaller commitment in an agreement with a global labor union, IndustriALL: to guarantee production volumes when Cambodian unions sign bargaining agreements that include higher wages, and to pay for the resulting higher labor costs.

Nike is not a signatory.

European and U.S. regulators could take measures to increase accountability for wages. Jason Judd, executive director of the Global Labor Institute at Cornell University, said they could require publicly traded companies like Nike to consistently disclose what factory workers earn when producing their goods.

H&M currently reports what its foreign suppliers pay workers on a country-by-country basis, for example. Puma did too, until stopping this year. Nike did it once — in 2001.

“Companies have enormous leeway in what they report,” Judd said. “It’s enormously difficult to compare within firms across years. Between firms, impossible. Companies are able to pick and choose how they tell their story.”

Knight, who did not respond to requests for comment, wrote in his 2016 memoir that the question of wages for Nike’s factory workers would always remain.

“The salary of a Third World factory worker seems impossibly low to Americans, and I understand,” wrote Knight, whose net worth Forbes put at $28.5 billion as of April 21. “Still, we have to operate within the limits and structures of each country, each economy; we can’t simply pay whatever we wish to pay.”

Knight recounted a story, one that’s hard to verify. When Nike tried to raise wages in an unnamed country, “we found ourselves called on the carpet, summoned to the office of a top government official and ordered to stop. We were disrupting the nation’s entire economic system, he said. It’s simply not right, he insisted, or feasible, that a shoe worker makes more than a medical doctor.”

At Y&W Garment, payroll data shows, line workers were nowhere close to making that much.

On average, they earned $236.25 a month with incentives.

The factory doctor made $581.