Labor Unrest Unsettles Booming Indonesia
时间：2012-02-23 07:26:27
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Indonesia has some of the cheapest wages in Asia, making it an attractive destination for companies feeling the pinch from rising labor1 costs in China and elsewhere in the region. The standard minimum wage in Jakarta is $170 a month compared to $240 in Shenzhen.
It also has a booming economy: Consumer-goods manufacturers and commodities exporters hauled in record profits in 2011.
But labor unions have taken notice, and now they're demanding a bigger slice of company revenues.
In late January, months of unrest that accompanied demands for wage increases
culminated2 in a protest by 20,000 workers at an industrial estate on the
outskirts3 of Jakarta, effectively shutting down scores of businesses.
In response, the government and the Indonesian Employers Association, a lobbying group also known as Apindo, agreed to workers’ demands for a 15-percent salary hike.
Apindo's deputy chairman Hasanuddin Rachman says while his group supports raising wages, not all companies can afford to.
"If the company is able to pay, please pay, but we have to protect SMA, small and medium enterprise, who are not able to pay this minimum wage," he says.
Many companies plead poverty when negotiating employee wages, but January’s settlement with Apindo and a high-profile agreement with the U.S.-based mining giant Freeport McMoRan have encouraged labor unions looking to raise salaries.
Freeport's Indonesia operations bring in about 30 percent of the company’s global revenue, which totaled more than $5 billion in 2010. Its Indonesia-based employees received wages starting at $1.50 an hour before they negotiated a 37-percent increase in December.
Labor unions are also demanding a renegotiation of 2003 labor laws that
mandate4 high
severance5 payments for terminated workers, a regulation many companies simply ignore or
circumvent6 by hiring contract
laborers7.
The result, say union leaders, is a significant decline in the number of permanent workers since 2003. Whereas government Officials have discussed revising the regulations, talks have broken down in recent weeks, and lawmakers now say they have no intention of revising the law.
A powerful alliance of the country’s main labor unions has warned that, until reforms are
implemented8, they will continue to stage rallies and strikes.
Hasanuddin worries about the potential impact the
ongoing9 unrest would have on foreign
investors10.
“They’re concerned that if the situation is like this they’ll move to another country," he says.
Japanese and South Korean businesses have recently filed complaints with Indonesian authorities claim the unrest has
severely11 harmed their businesses.
"So that’s why we have to take care of this situation," says Hasanuddin. "We also
persuasively12 talk to Korean Embassy, Japan Embassy: ‘Please don’t go from Indonesia. We will settle this problem.’”
Hasanuddin has appealed to the government to
reassure13 investors that it is serious about taking action, but so far there is little to indicate that
negotiations14 are nearing a resolution, which means labor unrest is likely to continue.
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