June 9 (Bloomberg) -- Asian workers who stitch nearly all the world’s soccer balls have seen little improvement in lives dominated by poverty, a report said days before the start of the World Cup, which promises sports gear companies a sales bonanza.
Thirteen years after companies such as Germany’s Adidas AG and Nike Inc. joined labor and development organizations to end the use of an estimated 7,000 children to stitch soccer balls, “child labor continues to exist” in the three main ball-making countries of Pakistan, China and India, according a June 7 report by the Washington-based International Labor Rights Forum.
In those countries and Thailand, the fourth major ball- producer, adult workers often are paid too little to support their families. Some children still stitch balls at home, while others have migrated to new work, the report said.
“The international campaign of the 1990s removed bonded child labor from our soccer-ball industry, but these children moved to auto workshops, brick kilns and the like,” said Arshed Makhdoom Sabir, president of Ours Pakistan, a non-profit, development organization in Sialkot, Pakistan.
The labor forum’s researchers surveyed 218 workers for Sialkot companies that export balls and other products to sports retailers including Nike and Adidas, the two largest in the world. More than half of the workers reported 2009 pay that was below Pakistan’s monthly minimum wage of 6,000 rupees ($70), the report said.
‘Bigger Profits’
For sewing together the 32 polyurethane outer panels of a soccer ball that sells for $50 in the United States, a Sialkot worker is paid as little as 50 rupees (59 cents) “so obviously international companies can make bigger profits in Pakistan,” Sabir said.
Adidas, based in the Bavarian town of Herzogenaurach, is sponsoring the FIFA World Cup and 12 of the 32 competing national teams, in an effort to beat its 2008 record soccer- related sales of 1.3 billion euros ($1.92 billion), which was fueled by that year’s European Championship tournament. Beaverton, Oregon-based Nike is sponsoring 10 teams in the tournament that kicks off in South Africa on June 11 as it campaigns to cut into Adidas’s dominance in the sport of soccer.
Nike “has been working to change how factories in Pakistan pay for soccer balls to shift the industry from a piece-goods system to a wage-based system,” Nike spokesman Derek Kent said in an e-mail message. The company “hopes to leverage this new model and our experience to establish best practices in the industry.”
Informal Economy
While Pakistan’s economy grew an average annual 7.2 percent from 2004 to 2007, the availability of formal jobs for Pakistanis declined, said Haris Gazdar, an economist at the Collective for Social Science Research in Karachi, Pakistan. By 2008, nearly 83 percent of male workers, and 93 percent of employed women worked in the informal economy -- including as soccer-ball stitchers -- beyond the effective reach of minimum wage laws and most other workers’ protection rules, Gazdar said.
Seventy percent of Pakistanis stitching balls are casual workers, often in violation of a law requiring employment contracts and the status of “permanent” worker after nine months of employment, the ILRF report said.
Pakistan on June 5 increased the minimum wage to 7,000 rupees ($82) per month, although “it might need to be twice that level” to let most workers meet basic needs for the average family of seven people, said Gazdar. The World Bank estimates that a quarter of Pakistan’s 180 million people live on less than $1 a day.
China, India
Sialkot-based Awan Sport Industries Ltd., which makes balls for Adidas, and Silver Star Group, which manufactures for Nike, provided significantly better working conditions than most local ball-makers because they used more permanent employees “in formal factory settings,” the report said.
Most Chinese soccer balls are machine-made, although companies in Jiangsu province outsource hire local women and children to hand-stitch balls, according to the report. Children continue to hand stitch soccer balls in the Indian cities of Meerut and Jalandhar, it said.
--With assistance from Matt Townsend in New York. Editors: Mark Williams, John Brinsley
To contact the reporter on this story: James Rupert in New Delhi at jrupert3 [at] bloomberg.net
To contact the editor responsible for this story: Bill Austin at billaustin [at] bloomberg.net