Indonesia Unions Announce Another Strike as Wage War Continues

OMY-STRIKE-048544-01-02_preview

Indonesian workers stage a rally along Jakarta’s main road and block traffic on Nov. 1, 2013 during the last day of two-day nationwide strike. Tens of thousands of workers went on strike across Indonesia. (AFP Photo)

The head of Indonesia’s largest union organization has announced a new strike across several regions of the archipelago to pressure provincial governments into making greater concessions on minimum wage, a report by the state-run news agency said on Monday.

“The peak will be on Nov. 25-26,” head of the Confederation of Indonesian Workers (KSPI) Said Iqbal said as quoted by the state-run Antara news agency. “When all factories in industrial areas in Jakarta will stop production and thousands of workers will head to City Hall to force governor [Joko Widodo] to revise the minimum wage in Jakarta at around Rp 3 million [$258].”

In addition to next week’s scheduled strike, workers were planning on demonstrating in front of the Jakarta Legislative Council (DPRD) building on Monday.

The cost of labor in Indonesia is frequently cited as one of the factors that has driven foreign investment and enabled domestic companies to compete in the region, especially as China’s advantage in this regard has been ceded, to an extent, by approximately 15 percent aggregated wage hikes each year over the last decade.

Workers in Jakarta were given a 44 percent increase in the minimum wage this year, and have been told that the mandatory minimum will be 9 percent higher next year — roughly the level of inflation. Pay increases around the archipelago were similarly weighty in 2013 but many regional governments have yet to decide on the increase for 2014.

“The wage [for 2014] has been decided at Rp 2.44 [million],” Jakarta Governor Joko Widodo said earlier in November. “There are risks to every decision. We hope this will not lead to any [rejection] by laborers.”

The KSPI’s position, in the case of Jakarta, is that Joko’s decision on a 9 percent pay rise for 2014 is not commensurate with the surge in the cost of living with which the capital’s workers are having to contend.

Unionized workers from industries ranging from textiles to metalwork held a two-day, nationwide strike beginning Oct. 31 in an attempt to show strength in numbers ahead of wage announcements. In Jakarta, they had demanded Rp 3.7 million per month — a proposal that drew several nervous proprietors to emphasize that such a sudden jump in the cost of labor would send their businesses to the wall.

Nelly Marlianti, a spokeswoman of the National Consolidation of Workers Movement (KNGB), told Metrotv.com on Sunday that, in addition to a show of numbers in the capital, workers would also rally in front of the Bekasi mayor’s office and at government buildings in Bandung.

Bekasi — a satellite city to Jakarta’s east that includes Southeast Asia’a largest industrial estate — has the highest minimum wage in the country at Rp 2,441,954, although it is only around 10 cents higher than Jakarta. Wages in Depok have been set at Rp 2.39 million and Bogor at Rp 2.24 million.

Prior to the two-day strike, Said had indicated that 3 million workers would down tools to demonstrate for a greater share of the spoils. In the end 50,000 people took to the streets — the majority of which were in the capital.

Many figures in the executive offices of companies — foreign and domestic alike — feel that Said was chancing his arm with what would have been a near-doubling of the minimum wage over two years if his demand had been met.

But as the threat of another strike looms large over Indonesia’s labor landscape for a second time in a month, Said is hoping to persuade governors that Indonesian workers deserve a significant boost to their income as fuel-price increases and general inflationary pressures erode their purchasing power.

“We only demand the minimum wage to be increased at Rp 3 million,” the union leader said. “[Joko and Basuki] should dare to take this decision.”

  • Pelan2

    Good news for the governments of Myanmar, Thailand, Vietnam and Cambodia. Investors will soon be knocking on your door..

  • Kangkung

    As long as there is no major, I mean a really massive one, lay offs the labors will never believe that increasing their salary will cripple the companies.
    They basically are saying ” show us the massive lay offs (including those who are protesting) then we will believe you..”