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LABOR PROBLEM: A TORN IN FLESHES  

by Wahyuni Kamah

Not only national companies that use Indonesian laborers like a cow to milk dry, but also  big transnationals such as Nike, whose spanking-new black sneakers were used by members of Heaven’s Gate cult in preparing for their deaths.  Transnationals seek out low-wage countries and highly repressive governments.  The two go hand-in-hand because repression prevents workers for organizing better wages and condition.

On July last year Cicih Sukaesih, a female Indonesian labor  who was  fired four years ago from a Nike shoe factory in Indonesia, was in Portland, Oregon, US on a speaking tour of five US cities.  She slipped into the Nike Town store as demonstrators were gathering in front.  She related the emotions she had felt in the store’s shoe department: “My first thought, as I held those shoes in my hands, was a pride at how well-made they were and that I had a part in making such fine a shoe. And then I put them on my feet.  They feel so good!  For years I worked in the factory, and until now I never had a pair of Nikes on my feet. We could  not even think of buying them at the wages we received.’  To purchase a pair of the shoes she makes, Nike worker would have to devote every penny from two or three months of her paychecks.

Nike factory in Indonesia  contributes 35 percent of  Nike exported shoes in international market.  Their 6000 laborers staged a strike on April 25.  Office of  PT HASI (Hardaya Aneka Shoes Industry) in Tanggerang, in West of Jakarta, which produces Nike shoes was damaged.  The laborers also damaged a car belonging to Engkos Kosim, the Head of Man Power Dept. of Tanggerang, and injured the security officer, Ernowo Prasetyo.  Two days earlier, on Tuesday, around 10,000 workers of  PT HASI marched 10 km from factory to Tanggerang City Council causing traffic jams.  They demanded welfare improvement which among other things included repayment of their premium attendance namely Rp. 4,000 per week (± US 1.8) and 10.07 percent increase of minimum wage.

While on April 24, 1997, 2000 laborers of PT Surya Achilles Indonesia in Bekasi, East of Jakarta demonstrated silently.  According to the laborers, since 1995, the company which produces shoes exported to Japan has paid Rp. 4,300/day or Rp. 128,000 monthly.  “Our wage remained the same as in 1996 and in 1997 the company announced that our wage would not be risen,” a labor said.  On April 22, the company announced that it was only able to pay Rp. 5,200/day or Rp. 156,000/month which is below the 1997 monthly minimum wage (Rp. 5,700/day). Besides, laborers demanded full payment of their over-time money.  They only earn 2-hour overtime money  per day although they work 3-4 extra hours.  The management also cut their wage Rp. 1,500/ week without giving explanation.

On June 2, 2500 laborers  of PT Sony Elektronik Indonesia in Bekasi which produces electronic goods, were on strike demanding 16 requirements.  Their main claims included periodical wage rise, health allowance and wage distinction between new and old laborers.  While on the same day, hundreds of  PT Surabaya Nurleater laborers in Surabaya, East Java, demonstrated on the street. The laborers demanded the company whose leather gloves and garments products are exported to US, to reemploy four laborers that had been fired.

On January 22 the government announced that beginning on April 1st, the monthly regional minimum wage in each of 27 provinces is risen 10.07 percent.  The increase varied in each province ranging from the lowest in Batam (South Sumatra) (6.57 percent) to the highest in Jember (East Java) (18.05 percent). The previous monthly minimum wage in Batam was Rp. 220,500 and now  it is Rp. 235,000.  In Jember the  wage was  increased from Rp. 111,000 to Rp. 127,500.

Reginoal  minimum wage is determined every year. The determination is based on minimum life need, consumer price index, job opportunity, and general regional wage, development and capability of each company, and economy rate.  The amount of new regional minimum wage is based on monthly wage and is decided by decree of Minister of Manpower.       Prediction of  the minimum need is  3,000 calorie per day.  In each province, the component was adjusted with local cost and local  inflation rate.

Though the  minimum wage was risen, laborers remained unhappy because they already struck with the increasing price of nine basic needs.  “It is really a burden for FSPSI (All-Indonesia Workers Union Federation) to restrain the flare among the laborers,” said Sugeng  Sutrisno, Secretary of Chemistry, Energy and Mine division of East Java FSPSI.  Moreover, the standpoint used to increase the wage still referred to the scale method in 1956. For instance, the light source in labor’s house is karosene lamp and bed is made of  plaited mat.   It disadvantages laborers, said Indro Sugianto, Director of Legal Aid Institute Surabaya, East Java. “It should have used minimum physical needs for single labor in current condition”, Indro added.  The figure below minimum life need makes laborer live inhumanly.  Moreover in many factories wage ratio between the highest manager and labor is 250:1.  It is beacuse  economy development in Indonesia doesn’t provide wide work oppportunity,and it goes hand in hand with  the wide number of unskilled low workforce.

It’s a pity that the minimum wage is calculated individually.  It is not related to the number of children that labor has.  The rise is only limited to daily wage, said Imam Sudarwo, House member of Commission VI and former SPSI chairman. Therefore, some unrests that demanded wage rise were a normative phenomenon.  It’s normal, he added

Bomer Pasaribu, member of the House and Chairman of FSPSI  commented that average labor cost in Indonesia is very low, it is only 7-9 percent of total unit cost.  To increase Indonesian labors’ wage  is quite difficult  because on the other hand, there are invisible cost, collusion cost, free rider, rent seeking cost, and so on, which can be twice or three times higher than labor cost. Comparison of wage and productivity Indonesia is categorized the lowest among developing countries of new Asia industrial countries. World Bank report in 1995 revealed Indonesia has the lowest wage, it’s only Rp. 571 per hour. It’s the same as in Bangladesh. It reflects knowledgemnet to Indonesian laborers is affected by paradigm “very low wage is a comparative excellence.

Are foreign investors more drawn to invest in Indonesia because of the above paradigm?  The conscutive increase of wage and salary  makes investment cost in Indonesia sharply incline.  It is also induced with the increase of property price.  Moreover, red tape, bribery and other illegal payments could make Indonesia less attractive to foreign investors.

 According to Sjahrir, director of the chamber’s Institute for Economic Studies Research and Development, World Economic Forum rated Indonesia the worst country in terms of irregular additional payments  or illegal payments in 1997.

“Foreign investor tolerate irregular payments and count them as routine business expenditure now, but they will be concerned about them eventually,” Sjahrir said.  Indonesia’s success in climbing from 30th place to 15th pale on the forum’s 1997 Global most competitive economies ladder, would be harder to maintain next year, he said.