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Rising costs drive Indonesians to the streets

Indonesian government forced to limit outsourcing and raise the minimum wage amid growing unrest.
Last modified: 23 Nov 2012 11:14

Dede Suwaria has been a shoe factory worker for 17 years at the Swiss based company Bata. The shoe factory is one of the oldest in Indonesia and their monthly salaries have always been low. Like in most other companies in Indonesia workers are not being paid more than around $100-$200 each month.

Dede always managed to make ends meet despite rising costs of education for her children and the price of electricity and water going up steadily.

At least she was a staff worker for 13 years and could count on some government protection.

In the past few years though, employers started to evade Indonesia’s strict labor laws and began to lay off staff workers only to hire them again as freelancers, taking away the little security they had.

Many companies started to outsource most of their work to casual who are not protected by any labour laws.

Dede suddenly became a casual worker and lost her job security. For weeks she has been protesting outside her factory that had been forced to close down temporarily after its management felt protests became too aggressive.

Their pressure of mass protests paid off.

Under pressure from massive protests, the government has decided to limit outsourcing only to cleaning work, security, transport, catering and mining.

Provincial governments also gave in to demands to raise the minimum wage. Workers in Jakarta will receive a 44 per cent increase to around $230 each month and other regions are already following suit.

Still the protests have continued.

The head of the confederation of Indonesian trade unions Said Iqbal says he wants to keep the pressure up:“Yes, our main demands have been met for now, so that’s why the protest on Thursday was only half as large as we had announced. From 70,000 workers to only 30,000. But we want to show to the government that they have to be firm."

The workers main concern now is that employers will challenge the government’s decision to limit outsourcing and raise the minimum wage in court.

Apindo, Indonesia’s main employers association has already announced lay offs due to the rising labor costs.

“We are losing our competitiveness ,” says Sofjan Wanadi, Apindo’s chairman. “Companies are already leaving Indonesia, due to the labor protests and rising costs.”

Iqbal is not too concerned about all this. “Indonesia’s economy is booming, its grows with more than 6 percent each year. Its time for us to get a fair share.”