Here’s why more than 7,000 Nike employees just got a raise

About 10% of Nike’s 74,000 employees around the world will get pay raises, according to an internal staff memo that went out on Monday. Many are taking this to be a direct response to the claims of workplace misconduct and discrimination against women that came to light in late April after more than 50 employees shared their negative experiences with the New York Times. This led to an exodus of several top executives, including brand president Trevor Edwards, who was seen as the likely successor to current CEO Mark Parker.
Earlier this year, female employees at the company brought their complaints to Parker himself in a comprehensive document. Female employees reported instances of explicit abuse, such as times when male supervisors referred to them as “stupid bitch” or used a vulgar term for female genitalia to refer to other people. Some women described a frat boy culture where male colleagues would openly discuss which city had the best strip clubs in front of them. When they brought these issues to HR, they were sometimes told to meet the HR manager at outdoor cafes on the company’s campus, which hindered them from speaking freely.
This toxic culture apparently trickled all the way down to how female employees were compensated. Nike recently carried out an internal pay review, and Parker announced at a companywide meeting two months ago that the company would change its compensation and management training programs in an effort to work toward its equal pay and diversity goals. He also apologized for not catching these problems sooner. When these pay changes were announced on Monday, the memo described them as part of an effort to maintain a corporate culture “in which employees feel included and empowered.”
It is widely known that there is a pervasive gender pay gap in the United States, which is aggravated when you bring race into the equation. Nike appeared on the surface–until recently–to be a progressive brand, and by extension, a progressive employer. (The company is based in Oregon, which ranks 24th out of all 51 states in terms of how wide the pay gap is.) But it is now clear that thousands of Nike employees were earning less than the company believes they deserved.
While there are few companies that offer pay transparency, Fast Company‘s reporting shows that allowing employees to see what their colleagues are earning is one step toward avoiding the kinds of pay discrepancies that Nike employees experienced. There have been efforts to curb the gender pay gap, both at the company level (with startups like Buffer experimenting with full transparency) and at the state level (with laws in New York and Massachusetts that prevent employers from asking a job candidate about their previous salary information). According to a recent report by Accenture, it will be possible to close this gap by 2044 if companies work toward this goal.
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