cc >> Cynthia Williams: He's the
director of the Center on State, Local and Tribal Governance.
He's a founding director of the La Follette Institute,
which many of you may be familiar with, and he's chaired
several major gubernatorial task forces and served on
several tribal and local government commissions on human
resource management issues, which I think may play into,
oops-- what we hear about today.
[LAUGHTER] So I also want to
mention that he's received distinguished service awards
from the Women's Political Caucus and the Wisconsin Equal
Rights Council. He's coauthored several books
including one on politics and policy in American states and
communities, and a number of books that are used in teaching
public management. So without further ado,
thank you very much. [APPLAUSE]
>> Dennis Dresang: Let me turn myself on here.
Okay, this is working. Good.
How about that? I should also mention that part
of my background and the major reason for my being here today
is that I served on the athletic board for eight years from 1992
through 2000, and if you sort of think about that time period, we
went to the Rose Bowl in 1993, you're welcome.
[LAUGHTER] What can I say?
And I also served on the committee, we'll talk more about
that committee as we get into the discussion.
It's called the Labor Licensing Policy Committee which advises
the chancellor about fair trade and sweatshop kinds of issues.
If we think about sweatshops, one of the things that we
frequently think of is that these are large factory like,
often in a warehouse, low skilled kind of people
who are worked very, very hard. And that's partly correct,
except that increasingly the issue of being low skilled
does not really apply. Lots of times these people are
very highly skilled. And this is a worker at a
sweatshop in Honduras who has to really master a very complicated
machine, and a lot of factories that produce apparel, whether
it's university apparel or other apparel, use a variety of
machines, sometimes several different vintages to do the
same kind of thing. So a worker going from one
machine to another really requires a lot of training.
And so the training and experience is there.
So we should right away get out of our mind the issue of a
sweatshop being low skilled people.
Not necessarily. What is a sweatshop?
Well, generally the definition or the conditions that we think
of for a sweatshop have to do with conditions of employment,
and by that I mean sometimes the conditions of employment are
unsafe, they're dealing with hazardous materials, they're
dealing with dangerous machines, accident prone kinds of
conditions for working. Sometimes we think of conditions
of employment as they relate to women's rights.
A condition of employment may be that someone provides sexual
favors. A condition of employment may be
that you may not get pregnant. Once you get pregnant, you're
automatically terminated. So that kind of fits in that
particular kind of category and umbrella.
The issue of course that I think all of us would think of when we
think of sweatshops has to do with how much people are paid.
And the concept of living wage is used here, not necessarily
minimum wage. Even in our country there's a
difference between minimum wage and the kind of wage that you
need to earn in order to actually live and meet your
day-to-day expenses. And, importantly, a part of the
sweatshop issue is right of association.
Now you may think that this means unions, that's okay.
Typically it does but not necessarily.
And there are factories, there are organizations where workers
associate, they have a representative but they are not
necessarily in a union situation.
They may not have a contract, but they do have representation.
There are some important moral dilemmas that raise policy and
even philosophical issues when we're dealing with sweatshops.
One of those issues is even if we're talking about bad working
conditions and a low wage, one might argue that, well, a low
wage is better than no wage. Employment is better than abject
poverty. And there are, indeed, people
who will make an argument, a very passionate argument, that
sweatshops are okay. The low wages are okay.
That's just part of world competition.
That's part of globalization. That's part of the dynamics when
different companies are trying to get the lowest possible labor
costs. And if you're getting the lower
labor cost, that means low wages but the low wages, they say,
that's better than no wage. Others, obviously, are arguing
that when we're thinking about major apparel shops, which is
our focus today, Adidas, some people pronounce it Adidas, it's
a German company, they pronounce it Adidas so that's what I'll
do, or Reebok or a lot of these apparel companies are making are
big profit. And so the argument against
sweatshops is obviously well, hey, you can share some of those
earnings, you can share that profit with the people that you
depend on to produce your apparel.
For the university, we've got some moral dilemmas as well.
And that is we get a lot of revenue when people around the
country and around the world buy something and it's got Bucky
Badger or University of Wisconsin on it.
That logo is worth something. We get royalties and I'll go
into the whole process of how that happens.
But for us, there is an issue here of revenue, and you can
make an argument that, boy, we get a little bit too strident
about not dealing with the brands that do rely at least in
part on sweatshops and we're kind of cutting off our nose to
spite our face. That obviously the other
argument is an argument of justice, it's an argument of,
well, who do we, as a university, want to be
identified with? What kinds of causes, what kinds
of concerns do we have as a university community, and how
should we act on that? And there are debates, and I
respect the debates, that occur on both of these kind of moral
dilemmas. One of the things that is really
just ubiquitous when we're talking about apparel companies
and a lot of other goods, again we're really thinking primarily
of apparel as well as little trinkets, key chains and stuff
like that that you might have a university logo on, ties,
are these codes of conduct. There's a concern about
sweatshop conditions, and I've just described those, and so
codes of conduct are very, very common, and sometimes there are
multiple codes of conduct. If someone wants to produce a
sweatshirt with the University of Wisconsin logo on it, they
have to meet our University of Wisconsin Madison code of
conduct. They've got to meet an
international code of conduct. They frequently have to meet a
code of conduct in the host country wherever the factory is.
These are multiple, they typically have the same kinds of
features. And what are those features?
One very important and obvious one is living wages.
That the workers are paid a living wage.
Working hours, the whole concept of overtime, 40-hour work week,
that's what we're talking about. Allowing the workers to get some
sleep and get some rest. Child labor, that is not allowed
according to any of these codes of conduct.
Forced labor, likewise, and we can think of forced labor in a
number of different ways. Some of it physically forced,
others where you're forcing somebody because of a certain
circumstance or because of debt that is owed to the company
that's employing you, that kind of thing.
Women's rights, particularly we're talking about issues of
sexual harassment, requiring sexual favors, women's rights as
it applies to pregnancy and childbearing kinds of things.
Those are typically in a code of conduct.
And then freedom of association. And I should point out, and
we'll talk about compliance and oversight issues in more detail,
but just a general kind of principle that I'd like you to
keep in mind is that oversight is really difficult.
It's a very complicated issue, and to some extent the best
oversight that we can really have is right there in the
factory floor from a representative of the people who
is there mindful of what's happening to their coworkers.
And so this freedom of association is kind of a process
one that really relates to all of the other kinds of issues
when we're talking about a code of conduct.
It really helps with the whole enforcement mechanism.
Now, those are some general points, what about the
University of Wisconsin and apparel?
There are two very separate kinds of issues in terms of how
we relate to clothing apparel. One has to do with the athletic
department, per se, and the other has to do with consumers,
with fans, with people who are wearing clothing on the street
or wherever and it has a university logo.
First of all, when we're dealing with the athletic department,
the issue here for us is in way it's an opportunity that has
come with our success. After I won the Rose Bowl
in 1993... [LAUGHTER]
The university got a lot of attention.
The fan base, as you recall from that 1993 Rose Bowl,
was incredible. People all over, I mean getting
into that stadium was critical for a lot of people.
People that didn't make it to Pasadena were all excited, and
there was this fantastic demand for University of Wisconsin
apparel. People were proud.
And whether or not athletics ought to be the end all and be
all, that's a separate issue, but the point is that there was
really a lot of demand for University of Wisconsin
products. The University of Wisconsin just
catapulted to a high visibility in all sorts of different ways.
Nike had really done the pioneering in thinking of the
following situation, that is when you've got a university,
like we had become after the Rose Bowl in particular, a
university like Michigan which has always been very visible,
University of Texas, another university with a big fan base,
that you can have fantastically successful marketing by these
universities, particularly as they are featured a lot on
television, if you have that logo on those uniforms.
Right? What are wonderful, subtle, but
what a wonderful opportunity for marketing.
And so Nike started it and then Reebok kind of saw the wisdom
and they approached us. And they said, hey, tell you
what we'll do, we will supply all of your teams with all of
their uniforms and all of their equipment.
No cost. We'll do it.
That's on our dime. And we'll give you some
compensation in addition, some cash.
How about it? Well, we're talking about
equipment and supplies and uniforms, that runs around
$2 million a year for our program.
That's not chump change. There was the issue of, well,
but wait a second, what if you don't make the kind of pads that
we need for our hockey team? No problem, we'll let you get
them. The only issue that we have is
whenever the brand name of the equipment shows, it's either
going to be, in this initial case, Reebok or it's nothing.
You put tape over it or something like that.
We don't want to advertise anything else.
Our athletes, believe it or not, particularly on the track team
of course but a lot of the other teams as well, they go through
four to six pairs of shoes per season.
Amazing, isn't it? What if the shoe, because shoes
are very important, especially in a lot of sports, what if your
shoes don't fit our athletes? Not a problem, just don't have
the logo of some other brand showing so that if the TV gets
down there it shows somebody else's logo.
So they were very accommodating for that.
Now, in addition to the budget issue, to be very candid, and I
was on the athletic board when we had all these discussions, we
had a problem that this really helped us solve, and that is up
until this time when we had a universal contract for all of
our equipment for the teams, the deal was that if you were a
coach of a team we would give you a budget and it would be up
to you to figure out who you wanted to provide the shoes, the
equipment, the clothing, the uniforms for your team.
It was a coach by coach, sport by sport decision.
And wonderful coaches, wonderful people, for the most part, but
what was happening, and it just became a cultural kind of thing
where everybody started doing it, was there were all sorts of
side deals. All sorts of side deals.
You can just imagine the kinds of things.
Everything from free trips to exotic places to cash in the
pocket. But it was a situation where if
you're an employer, and these are major actors in your
organization, to have them all being compensated significantly
in different ways. We paid them a salary but then
they got all these side payments with what we referred to as shoe
deals, but they were more than shoes.
It was everything. So having these contracts really
allowed us to make a more rational compensation system for
our coaches. And we got a lot of negative
feedback from coaches, not all of them, but some of them were
very, very resistant to this particular kind of move.
Okay, so we've got the issue of contracts with the university
from suppliers. As I said, initially this was
with Reebok. Reebok is a subsidiary of
Adidas. And for the last five years it's
been Adidas that's provided and just this past August the
contract with Adidas was renewed.
So we will be dealing with Adidas for another five years.
So through 2016. And, again, they're providing
all the equipment and they're providing the athletic
department with $1.2 million in cash every year.
Now, the other issue is royalty from logo licenses.
If you or your neighbor produces a t-shirt and you put a
University of Wisconsin logo on that t-shirt, you're violating a
law unless you get permission to put that logo on.
And you're going to get permission if, number one, you
pay the university a royalty, and number two, if we, and it's
a specific office within the chancellor's office, regards the
logo as appropriate. So it's not obscene, it's
tastefully done, etc. And the logo that comes in is,
in most years it depends a lot on how much visibility there is
for the team. This year there's going be a
spike because we went to the Rose Bowl again.
That generates a lot. If our basketball teams,
men and women's, do well, there's probably a spike there,
but it's generally $2 million to $3 million, sometimes
a little bit more a year. And this is money that goes into
our scholarship fund. That's what it's used for.
It's not the general budget. It's not for general operations.
The issue with the logo licenses is that instead of doing all of
the monitoring and the contracting and everything else
ourselves, we work with the Collegiate Licensing Company.
And we're one of a little over 200 colleges and universities
that use the CLC. The CLC is also used by the NCAA
for the logos each year of the bowl games, the Final Four in
men's basketball and women's basketball, the Frozen Four
in hockey, etc. All of these are registered with
the Collegiate Licensing Company, and they have a code of
conduct as well. So part of the license is you
have to abide by this code of conduct.
It's related to labor practices. This is the royalty that you
have to pay for every t-shirt or sweatshirt or whatever it is
that you sell. And then the CLC does the
monitoring. They will, almost literally, go
around and see if there are street vendors by a football
game that are selling apparel that have a university logo on
it and there isn't, they don't have permission to do that.
To give you some senses to how useful it is for the university
to work with the CLC, we have, as I've got on the slide here,
you see it, over 500 companies that are producing things.
Sometimes it's just baseball caps, sometimes it's just one
particular item, sometimes, this is a small organization that
produced this particular tie. Others produce a wide array of
t-shirts and sweatshirts and fleece jackets and all that.
And they're in 47 different countries and over 3300
factories. So that would be a big thing for
us to administer ourselves. This is the logo.
So when you buy something that is licensed, you'll see a little
tag that has this on it. Some of you are shaking your
heads. We've got, at last count that I
saw, it was over 375 different logos that we have registered.
This is just an example of a handful of them.
Interesting little side story here about Bucky Badger.
In part to sort of give you a sense as to how important it is
to work with these licenses. Bucky is short, as you may know,
for Buckingham U Badger, that's the formal full title of our
mascot, and Bucky was around almost from the first time that
we had football, but in the 1930s and '40s we started
getting a little bit more serious about Bucky.
And in 1940 two things happened. One is we got a badger that was
actually trapped in Eau Claire, Wisconsin, and brought the
badger to the football games and had the badger on the sidelines.
Well, badgers are cantankerous mean, ornery guys.
And after it chewed the ankles of a couple of our quarterbacks,
we decided that that wasn't a good idea.
So Bucky went to the Vilas Zoo and was at the Vilas Zoo until
Bucky passed away, that Bucky passed away.
The other thing that happened in 1940 is for the first time we
had the kind, generally, it was a little bit different, the kind
of cartoon like characterization of Bucky that we're all familiar
with. And what happened was Brown's
Book Store, how many people remember Brown's Book Store?
Oh, boy we're all of the same age.
[LAUGHTER] Brown's Book Store
was the organization that paid for that characterization.
It was developed by a company in California, and they started
putting it on various kinds of things and selling it and a lot
of local merchants started doing it as well.
It became very, very popular. University of Wisconsin athletic
department did not use that characterization until eight
years after Brown's first got it.
So 1948 it started appearing on football programs and things
like that. Well, in 1988 the university
thought, gee, you know, it would be a good idea if we licensed
this and get some royalty from people who are using Bucky the
logo and Bucky the name. Well, Brown's, which by that
time had been bought out by University Book Store, sued.
They said, that doesn't belong to you.
We developed it. We paid for it.
We've been using it. It's in the public domain.
And the court case agreed with then University Book Store.
And so Bucky is, since that particular event, Bucky is now
licensed by the United States Patent and Trademark Office for
the University of Wisconsin Madison but in a kind of unique
category where there's also a recognition that there is,
especially the characterization that was developed in 1940,
is in the public domain. And so you will see that around.
There will be Bucky Badger stores.
The name will be used. And they are not paying royalty
to the university. Just think of how much more
royalty we would have if the university had licensed the
mascot, the characterization of Bucky a long time ago.
And, by the way, as a way of just clarifying things, in 2003
Bucky got the motion W on the shirt instead of just the
straight W. And that, in part, was done
because the motion W is being used a lot, but for trademark
purposes, now it is clear, if you see Bucky with the motion W
that is officially licensed, recognized, that's not in the
public domain. So it doesn't take much to sort
of change some of these logos and get them licensed the way
that you want to. It's amazing how many Ws are
licensed by us. Let me tell you, as a way of
illustrating some of the issues here, the story about Adidas and
the university. Remember now, Adidas is the one
that we've got the contract with, university Athletic
Department, and you and I can go to a store and get Adidas
apparel. So it fits both categories in
terms of the relationship to the university, the importance of
Adidas to the revenue and the financial well-being of the
university. Adidas does have a, it is part
of the contract that is has with the athletic department that
specifically it has agreed to the university's code of
conduct, which has all these things, these features that I
mentioned to you before. It has also got its own code of
conduct. It has a code of conduct that it
has agreed to because of the licensing operation and the
like. Well, in 2005 a factory just
outside of San Salvador, known as Hermosa, suddenly closed.
And it closed primarily because workers were starting to
organize a union. Like other factories, the owners
of the factory in Hermosa were obliged by an El Salvadoran law
to pay for the health insurance of their workers, to pay into a
national pension system like our social security system, and they
were obliged to pay severance if the factory closed.
So they're supposed to pay a severance pay.
Adidas and others who contracted with this factory, so this
factory was not an Adidas factory, it was a factory,
however, that did work for Adidas and a number of other
apparel companies, not all of these doing collegiate wear.
Some of them just doing regular clothes that we wear every day.
It turns out that they were paying the money so that it
would go into these funds, and those funds were being embezzled
by the factory owner. When the workers lost their job,
and there were 260 people who lost their job when the factory
closed, they found out that the payments for the health
insurance were overdue. They had no access to health
insurance. That the payments into their
pension funds had not been made. And they got no severance pay.
Moreover, those 260 workers were blacklisted.
And I actually saw the list with the names on.
It was circulated to other employers throughout El Salvador
essentially saying these are cantankerous union organizers,
don't hire them. Well, we found out about this
and this Labor Licensing Policy Committee that I mentioned
earlier that exists on campus did some deliberation.
We did a lot of talking with representatives from Adidas.
We very seriously pursued the issue.
Let's be sure we've got the facts.
We felt like we were getting the run around a lot.
That didn't leave us with a very good feeling.
Adidas kept saying, hold it, you're pursuing us, it's the guy
that did the embezzlement who actually had been arrested,
he was out on bail, by the El Salvadoran government.
He's the person you ought to be going after.
He's got the money, why go after us?
And, of course, as you can imagine, our position was on the
one hand to be somewhat sympathetic but on the other
hand to say, well, we're going after you because you're in the
room and you've got these contractual obligations and you
really shouldn't be having as an excuse kind of shedding this
stuff off and shedding off the responsibility, that the code of
conduct that you agreed to carries with it a responsibility
to be sure that the people that you contract are following the
conditions. And you've got the ability to
monitor this kind of stuff and you haven't.
And you're telling us that you're not going to do anything.
These are 260 real live people, many of them with families.
This is just really not satisfactory.
And we very seriously, very seriously, talked to them, and
the chancellor did too, about the possibility of terminating
the contract with the athletic department, even though that
would be the at a cost to us, on the grounds that they didn't
uphold their part of the contract because they violated
the code of conduct. And that we would revoke their
license so that they would not be able to sell any apparel
that's got the University of Wisconsin logo on it.
2007, Adidas responded, finally. You can tell how frustrated,
I still feel frustrated with how long it took and how long these
people had to suffer. But they finally basically said,
okay, we will go after the factory guy and the money that
he's embezzled. We'll do that.
And in the meantime they compensated the 260 workers.
They trained them, to their credit, they realized as I
mentioned at the outset, we're not talking about jobs that
don't have any skills, they actually trained them to work on
several different kinds of machines, they helped them get
jobs, they did away with the blacklist, and it's not that El
Salvador is now paradise but at least we felt comfortable enough
so that we continued our relationship with them, and, as
I mentioned, we actually did just renew the contract that
they have with athletic department and that's going to
run through 2016. Now, let's talk a little bit
more about monitoring these codes of conduct.
They really are a challenge. First of all, you really have to
have information from the factories.
And we're talking about thousands of factories for
University of Wisconsin apparel, and we are not the major market,
share of the market, but we're important.
At over 3700 factories all over the world, man, obviously that
really in itself presents a real challenge.
And why do you have to focus on the factories?
Because it's going to be the factories, that's where the
compensation is going to be issued.
Perhaps even more importantly that's where the union activity
is or is not going to be occurring.
That's where sexual harassment is or is not going be occurring.
It's going to be at that factory level.
Financial records. For private companies, as you
and I know, their financial records are proprietary.
People can't just come in and say I want to look at your
books. And when we're talking about
these major apparel companies, they have contracts in many
different countries all over the place and they also, this
relates to the issue of the chain of supply.
It is extremely complicated. We could devote another whole
hour to the complications of if you just took a shoe and you
think about the different parts of the shoe, these shoes are not
made in one factory. The different parts are all made
in different factories, and then they are assembled in another
factory. And then the logo is put on in
yet another factory. It's very, very complicated.
Different actors, different steps of the process, and all of
these companies are, at least in a formal level, not always
informally, but at least in a formal level, they are not owned
by the brand companies. They're independent and they're
doing work for a number of different companies.
They're the suppliers and so you're talking about a lot of
different kinds of contracts. So it can become extremely
complicated. And then, believe it or not,
in some of these countries there's corruption.
[LAUGHTER] In some of these countries
there are sweetheart deals. The guy that I mentioned to you,
the factory owner in El Salvador, still not in jail.
Still out on bail, that's the technical issue.
Charges still pending. Money, who knows where it is.
So that complicates things too. Another kind of a challenge.
Well, it's kind of like with the Collegiate Licensing Company.
What we do is we work with independent bodies to do the
monitoring. CLC does some but most of their
monitoring is done in the United States.
Most of their concern is picking up an apparel and looking and
seeing if, number one, it's got the logo on, and number two,
it's got that little label, the CLC label, that that logo has
been registered and there is royalty.
That's their focus. Even though they've got the code
of conduct that deals with sweatshop kind of issues.
There are two major bodies that exist to do the monitoring of
the factories and get out there in the field.
They typically respond to complaints.
That's their major way of operating.
So somebody makes a complaint and then they go in and
investigate. One is the Fair Labor
Association, and the other is the Workers Rights Consortium.
The Fair Labor Association is a body that was established by
apparel companies. The Workers Rights Consortium
was established by Students Against Sweatshops in the year
2000. And the Students Against
Sweatshops has been a very strong, very articulate, very
well organized student group that has really been concerned
about sweatshop issues, and its name, of course, reflects that.
And the University of Wisconsin Madison, we debated a number of
years ago about how to deal with FLA and how to deal with WRC,
and we decided that we were going to have our primary
relationship with WRC. The FLA was sort of suspect from
the outset. When you're the one who might be
violating the code of conduct and then you say, well wait a
second, I'll hire these people to watch over me, just trust
them, it might be okay but right off the bat there's some
suspicion. And on the first reports that
they came out with looked like more like they were apologies
for the companies than anything else.
Now you could say that the WRC, it's biased in favor of the
workers. But when you stop and think
about what's the issue about here?
What is our concern? The issue is the workers.
And I have read, I'm not going to say all of the WRC
investigations and reports, but I certainly have read a lot of
them and I must say I am very impressed with the
professionalism of those reports.
And when they do investigations in response to a complaint, I
can tell you it is not that they are always going to say, oh, the
workers' rights are being violated.
There are a number of times when they have come out and their
conclusion is the workers misunderstand something, that
this is a charge that there doesn't really seem to be any
kind of evidence to support the charge and the like.
So in any case, we have been working with the WRC in terms of
the investigations and the like. Now, what kinds of steps can we
take if we get a report, and again we're going to be relying
primarily on the reports that are the result WRC
investigations. Not entirely but primarily
that's our source of information.
So WRC says, gee, there's a problem here, what do we do?
Well, one thing that we can do, obviously, is terminate the
contract. And here again I'm using the
term contract to talk about the athletic department
relationship. And I should also maybe just
mention, so you've got a good perspective on this, that right
now there are only 47 universities in the entire
country that have a contract like we have with Adidas.
Most of them are still dealing with a variety of suppliers,
dealing with you're providing the uniforms and you're
providing the shoes for the track team.
And somebody else is providing uniforms and shoes for the
basketball team. So it's very diffuse.
I don't know one way or the other if they're getting into
the same kinds of problems that we did with what we refer to as
the shoe contracts. I just don't know.
Another option, of course, is just revoke the license so they
can't sell anything with our logos on them.
And that is another possibility. We have not terminated
contracts. We have threatened it.
We have threatened revoking a license and we have done so.
We've revoked the license of New Era Cap.
It's a company in Mobile, Alabama, that has been found
guilty of actions against people in their factories who try and
organize labor unions. And they wouldn't even allow the
WRC in to do investigations. And they've been in trouble with
the Department of Labor and the like, and we just basically said
there are other people that can do baseball caps with university
logo on and we terminated the contract.
Lands' End, we terminated a contract, we revoked their
license. We revoked just recently, almost
a year ago, the license of Nike to have university logo on their
apparel. And we revoked the license of
Russell Athletics which is a subsidiary of Fruit of the Loom.
So we have acted in cases. And I've given you brand names
that I'm sure you're familiar with.
These are not small players. The cap producer is probably the
smallest of all of them. These are major players and they
have been major providers of royalty revenue to our
scholarship fund. So it has come at a sacrifice in
that sense. Public statements, that's always
an issue. And whenever we have terminated
a relationship with a company or even threatened, as in the case
of Adidas, we have done so publicly.
Press releases, the whole bit. And obviously that's not things
that the marketing departments of these companies particularly
like to see. Another issue is coalition with
other universities. There's a frustration, a tension
had John Wiley was chancellor and we were dealing with these
issues. And the tension was over a basic
disagreement. Many of us on the committee that
was advising Chancellor Wiley took the position that Adidas,
and I told you that story with some others, they were doing
something that was naughty and they should be punished.
John Wiley did not act as forcefully as we had wanted to
on the grounds that he didn't want to just do something for PR
purposes or just to make a statement or just because it was
right. He wanted to do something if it
was going to have an effect. And the University of Wisconsin,
with all due respect, we're in the top 10 of the universities
that sell apparel with our logos on, but we aren't the major
market. You've got to go to Michigan,
Notre Dame, University of Texas, they are in the top three almost
all the time. And so he basically said, look,
we go to Nike or something like that and we basically say you're
naughty, we're going to revoke your license, they're going to
yawn because we're just not that big a deal.
They're not going to change their practices just for us.
So what he proposed doing was establishing, instead, a network
among university administrators on this issue.
And he took the lead in doing it.
And in retrospect I've got to say that while we were
frustrated and frustrated with the time that this took because
he had to make personal contact and he had to persuade
presidents and chancellors of other universities to be
sensitive of the issue and work with us on this issue, it took
time. And it meant that we didn't act
as forcefully as some of us wanted to.
Turns out he was right, that it's important to have a bigger
share of the market, it's important to do this coalition
building with other universities.
And let me just tell you quickly about the Nike situation.
In 2009 there were two factories in Honduras that closed their
doors and shut out workers. Total workers was a little over
1500, and it was because they were organizing a union.
Turns out that somewhat like that situation in El Salvador,
the factory owners, eight months before they closed the factory,
were not paying money into the health program.
They didn't pay any pension. They were taking all sorts of
money and resources from the factory.
So this was planned, it wasn't just a situation even though it
seemed like it was done very suddenly, there was some
planning that went to it. WRC had a report and indeed
confirmed all of this. Confronted Nike.
Nike initially lied. There's no other way of calling
it. They said we don't have any
collegiate apparel. We might have some other stuff
but no collegiate apparel is produced by these factories.
In a way that was kind of dumb because that's an easy thing to
check up on. And WRC and FLA, too, checked up
on it and sure enough there was university apparel with logos
was being produced at these two factories.
Chancellor Biddy Martin last December, December 2009, said to
Nike, look, you've got to take care of this situation, and if
we don't have a satisfactory response in four months, we're
probably going to revoke your license.
And Nike responded by saying, well, you know, here we go
again. These are not our factories.
We just contract with them. We didn't do it, somebody else
did it. We'll talk to them.
And Chancellor Martin said that's not a very satisfactory
response. We'd like a response more along
the lines that Adidas had, at a minimum, when we brought up a
similar situation to them. Nike did not do anything, and
true to her word, she said, okay, that's it.
Four months were up and we terminated our contract, revoked
the license that Nike had. As of today, Nike still doesn't
have a license to use our logo. She then used some of these
networks that were being built by Chancellor Wiley and
immediately we got universities all over the country.
The most forceful responses came from the University of
Washington, from the University of Oregon, and from Cornell
University. Georgetown has always been right
up at the forefront. Unfortunately, Michigan is not
even on their radar screen. Students agitate on their campus
all the time, and they basically say we don't want to get
involved in this. Penn State has had the same kind
of reaction. Notre Dame has had the same
reaction. So it would have been nice to
get some, Texas, it would have been nice to get some of the big
players on board, but at least we got some of the medium size
players on board. And indeed, last July Nike said
okay, we give. And they wrote a check for two
million dollars and made whole the workers that were hurt by
that plant closing because of the union activity.
All is not well, most of them are still unemployed, but what
are you going to do? Another kind of response, a more
positive kind of response, is to say, hey, if there's a fair
trade, which means it's not a sweatshop kind of operation,
let's put our orders with them, let's do business with them,
let's give them some positive reinforcement, let's reward them
for doing that. And we have to some extent and
we have some local vendors. Fair Indigo, you may be familiar
with that store. It's got some university apparel
out at Fair Indigo. They only deal with fair trade
apparel. University Book Store has
prominent sections that deal with fair trade, and you don't
have to pay extra to have a fair trade, it's not like going to
the grocery store. You can get a sweatshirt at
University Book Store that's produced by a non-sweatshop
type, you can also get one that's produced by a sweatshop
apparel. But there is that that's going
on. At this point we can't really
have a contract for our teams because there is no fair trade
operation that's big enough to do it.
And indeed if somebody from University Book Store were here,
is anybody from the university book store here?
No? What they would I'm sure tell
you, and I believe them when they say this, they would have
more apparel, they would even phase out the sweatshop kind of
stuff if they could get fleece jackets and sweatshirts and
t-shirts and shorts. But it's just not being produced
at this point. Maybe that would happen.
Maybe it's in the future. And the other kind of response
that we have pursued and is a possible one is the designated
suppliers program which is a program that the Workers Rights
Consortium got going, and it has, again it's sort of a
positive sort of thing. What they'll do is identify
people who are in this particular program meet the
standards. There are 48 colleges and
universities that are, we're one of them, that are doing this,
and what we're basically doing is pushing the suppliers of our
products, products with our labels on, to work with people
that are producing apparel at least give them a three year
period, 25%, 50% and then eventually 75%, so we're not
even saying 100%, is from sources that are paying living
wages. Importantly that they are paying
the factories enough so that they can afford to pay living
wages. That's the way around of trying
to get into somebody's financial records, right?
Is that you basically saying, okay, one thing you can tell us
is how much you're paying under that contract, and if that's not
enough to pay a living wage, that's not good enough.
Something's got to give here. They do recognize the right so
associate, again, not necessarily unions but most of
the times it will be. That the factories don't just do
a little bit of this designated supplier stuff, but at least 50%
of the work that they do is with participants in the program and
that they allow inspections, inspections from WRC as well as
FLA or really anybody that wants to get involved.
Let me just end on a note before entertaining questions,
comments, and wise cracks from you, with recognition of who the
leaders are, who the actors are in this whole issue,
particularly as we deal with the University of Wisconsin and
sweatshop and apparel kinds of issues.
The chancellor is the one with all the authority.
Chancellor says yes or no on these things.
It's not something that goes to a larger body.
It is the chancellor. So the chancellor is really
critical. We have had two chancellors now,
John Wiley and Biddy Martin, who have been very strong, very
firm, very passionate on the issue, and they have been helped
enormously by someone who is usually behind the scenes and
usually these people don't get recognition and that's Dawn
Crim. I don't know how many of you
know Dawn but she's a very special person, and she's very,
very committed to the issues that we've been talking about
this afternoon and have provided them with a lot of advice.
She herself has gone down to a number of these factories and
done inspections and talked with workers who have been laid off
and the whole bit. The Labor Licensing Policy
Committee I mentioned. It's a committee that involves
not just faculty, which most of our committees are that way, but
staff, both classified and unclassified staff, and
importantly students. And I can't tell you how much
credit, assuming that you want to say that this is something we
should provide credit to, how much credit should go to the
students on our campus. It's one of these what if
situations. What if the students hadn't been
real active? What if they hadn't been
passionate? What if they hadn't been
articulate? What if they hadn't done their
homework? Would our chancellor, would our
faculty, would our community be attentive to the issue and acted
on the issue? My guess is actually that we
really need to give credit to the students for raising the
visibility and doing the homework, and some of these
students, individually as well as collectively, but I think of
some of the individuals as absolutely incredible, very
special people. Command a heck of a lot of
respect for the work that they do.
Athletic department is a prime mover.
Chancellor could overrule but that's the prime mover, of
course, on the contract issue not the apparel.
And then, of course, retailers and us, consumers.
So it's helpful to have a couple retail agencies here in town
that are on board on the issue. I grew up in Kimberly,
Wisconsin. Those of you familiar with
Wisconsin know that's a very kind of a small factory town,
very Catholic, so I feel very comfortable with guilt feelings.
[LAUGHTER] So join me in guilt as we
kind of look around at the stuff that we've got that has not
been produced by fair trade. Questions?
Comments? Yes.
>> I'm going to kind of put you on the spot here.
>> Oh, no. >> Based on your research and
your knowledge being on the committee, what brand should we
buy and what brand should we not buy?
>> Okay. For sure it's easier to answer
the latter. At least for the moment, Nike
has done something that's been, they've gotten a lot of praise
for back tracking and doing what they did in July, and they may
very well get re-licensed by the university.
They were not good actors and they generally have not been
very good actors. So they're on probation as far
as I'm concerned, but certainly Russell Athletics, Lands' End,
this New Era Cap, the ones that we revoked the licenses of.
That was done with good reason. We're not talking about
emotional knee-jerk reactions here.
They had chances. They're always given a chance to
remedy the situation. They did not.
Russell Athletics said they would, and then they lied
through their teeth, and my mom always told me that when
somebody lies on top of it, that's even worse.
So those are ones I would put on, they're certainly on my bad
list. Which ones do we purchase?
The frustration, even as we buy apparel for our every day
living, quite apart from university apparel, the
frustration is that there really are so few companies that are
fair trade, that are not sweatshop, and they don't
produce the full array. So it's sort of like, well, you
want a fleece, I've got a nice Badger red fleece with Bucky
right there and I like wearing it when it's cold out.
Well, that's produced by a brand where at least some of their
stuff is sweatshop. And, Chancellor Wiley was keen
on, in a way it was kind of a cheap shot, but he would say,
look, we can't have our teams go out there on the field naked.
[LAUGHTER] But you see the point.
The point is, at this point in time we do have to make some
compromises while pushing. And so I would, if I were buying
apparel, the first thing I would do for Badger apparel, I'd go to
University Book Store or I'd go to Fair Indigo, see what they've
got and see if they can meet my needs, and if not, I would
reluctantly then get something else.
Yes? >> How is a fair wage
calculated? Or a living wage?
>> Living wage? Good question.
The calculations, and this is done by the WRC, they get the
information to do it, is really very similar to the way we do it
in the United States. That some people refer to it as
a shopping basket kind of approach, and in the shopping
basket you do put food but you also put in not luxurious
housing, but what would you need to get a decent apartment
or a decent house of some sort? What are energy costs like?
It does not include having a car or that kind of transportation.
A little bit for bus transportation.
So it's really based on the local conditions, and it's what
at a minimum do you need? And it's going to change a bit.
Usually what they do is they do it for a family of four.
Now that could be if somebody is single and they don't have
dependents, obviously, from a need standpoint but most
employers don't consider need on an individual basis when they're
making compensation. They pay you for the job that
you're doing. >> Who makes the calculations?
>> The Workers Rights Consortium.
So they do it, and as I said, they actually go to the place
and get this information about what a living wage is like.
Yes? >> Why are they so insistent on
living wages for the other countries when they don't pay
them here? >> Well, if here means Madison,
Madison's got an ordinance requiring employers to pay
living wage not minimum wage. And it's controversial because
people say if I've got a store or company I want to locate I'll
just go on the opposite side of the street so I'm not in
Madison. But your question is good and
I want to treat it seriously and I think the answer is that we
probably ought to be thinking about living wage rather than
minimum, the way we do now. The minimum is somewhat
arbitrary. It's not really based upon a
calculation. It's done on a national basis.
>> And you can't live on it. >> You can't live on it,
particularly in some communities.
Even in the United States, we're big enough and diverse enough so
that a living wage is going to be a different dollar figure
depending on where you're living, right?
So it's complicated. The minimum wage that we've got
in our country right now is simple in a sense.
It's like poverty rate, if you're familiar with that.
Every January the federal government comes out with what
the poverty rate is. They do a poverty rate for a
family of four. And then when we talk about
eligibility for welfare programs or food stamps and stuff like
that, like in Wisconsin, as well as most other places, what we do
is we say, well, you are eligible for this particular
benefit if your income is at 185% of the poverty rate.
Well, we do that because we realize that the poverty is
really too low. That's poverty, yeah,
but that's below living. So, crazy, isn't it?
>> So who computes the living wage in this country or is it
just not computed? >> In this country it's usually
locality by locality. We don't have a national living
wage. >> Who's doing it?
I don't know.
Probably, I would think that most people would rely on the
wisdom of professors. [LAUGHTER]
I don't know. [LAUGHTER]
That's wishful thinking, I guess.
Yes? >> Any foreign countries where
the factories are, I suppose it would vary from country to
country too whether the employees would get, say,
unemployment compensation if they lose their job if there is
such a thing and things like that?
>> It does vary from country to country, you're absolutely
right. And what exists instead of
unemployment compensation, what exists in most of the contracts
are this concept of severance pay.
And it's got behind it philosophically the same idea as
unemployment compensation which is to provide people with some
funds as they transit from this job to that job and assuming
that there's going to be some down time there for a while.
And the severance pay is meant to do that.
And that's what's often been embezzled in the cases that
I mentioned to you, or just not paid at all.
So the concept of unemployment compensation, it exists more in
Europe but we're talking about factories that are not in
Europe. Some are in the United States
but most of these factories are in Central America Thailand,
Asia, increasingly in China, Indonesia, Philippines.
>> I think we can take one more question, and then we can talk
informally after that. >> Sure, sure.
>> Given the transient nature of the student body, how is the WRC
staffed? >> Good question.
The WRC is actually staffed with professionals so that the
student, what we do as a university is we pay a fee to
the WRC as our part in having them do investigations and
monitoring for us. And that's true of, let's see
there's 86 universities that rely on the WRC.
So that's one way that they get their money.
Students, again, sweatshops provide money as well.
Even though the students are transient, they still, they
raise money. They'll have fundraisers that
they do and part of the funds that they raise go to the WRC.
But we're talking about a professional staff, a lot of
them with legal training, but some economists, sociologists,
it's a pretty multi-disciplinary.
They have to speak different languages.
>> How much does the university make on an annual basis?
>> From the royalties? >> Yeah.
>> From the royalties, given some fluctuation year to year,
my guess is that with this year, Rose Bowl and all that sort of
stuff and the fact that Bo Ryan's team is going to the
Final Four... [LAUGHTER]
And the women's hockey team is going to get a national
championship again, anyhow, my guess is, I would guess that
this year is probably going to be about $3.5 million
in royalties. We do know about, and
that's, like I said, we're in the top 10, typically.
There's the big three and then there's a number of us that come
in right below that. The athletic department as I
mentioned, that's a contract. That's for five years.
They're getting a little over a million dollars in cash each
year, and they're getting clothing and equipment that
would be valued at around $2 million each year.
[INAUDIBLE] >> That's in addition, right.
Yep. And our teams are treated well
in that regard. You wear out a pair of shoes,
you're going to get a new pair of shoes.
Most of our teams, if you watch them, their uniform changes
every other year. So we're big time.
We should be. >> What percentage of the
royalties go to non-athlete students?
>> The royalties go all entirely to non-athlete students.
>> Really? >> Yeah, entirely.
There's not a penny that goes to the, and in part that's because
of the NCAA. NCAA allows us to give
scholarships to athletes. Their rules are somewhat
complicated because there are some sports where you give a
full scholarship or you give nothing.
Other sports where you can give partial scholarships
up to a certain amount, blah, blah, blah.
But whatever, that's all got to be done through the athletic
department through an athletic scholarship.
You may not use your general scholarship fund to pay a dime
of expense to an athlete. That would be a violation of
NCAA rules and Big Ten. Okay?
All right. Thank you.
[APPLAUSE]