An intriguing challenge: Survive on minimum wage

Jim Keady, Co-Director, Founder, Educating for Justice, Belmar, New Jersey

On Jan. 4 Peter Gardiner ("Bread Crumbs for the Poor") wrote in this newspaper that "All stakeholders should understand that in a market economy, the market should be the prime determinant of wage rates." "The market" is not the prime determinant of wage rates, human beings are.

Yes, it is true, human beings actually do make decisions and it is these decisions that determine what "the market" does. What is unfortunate is that the decisions to determine how the market will operate is left to a relative few that have the intellectual backing of economists like Gardiner.

The economy exists to serve humanity; humanity does not exist to serve the economy. Until economists come to understand this, we will continue to have economies (read human beings) that are desperate.

Gardiner also wrote, "Even if they (minimum wages) represent what is essentially a 'poverty wage rate' in the eyes of many beholders they should be held substantially below average wages at any point in time."

This is perhaps one of the most arrogant statements I have ever heard an economist make and shows utter ignorance of the human reality of living on the Indonesian minimum wage.

How is such economic logic played out in human terms? When a worker is making the legal minimum wage in Tangerang, he cannot afford to meet all basic needs. What is most distressing is that they cannot afford to adequately feed, clothe, provide schooling and health care for their children.

What a free market fundamentalist like Gardiner suggests is that these workers simply allow their children to continue to be malnourished and uneducated, while, on the other side of the world the companies they work for (like Nike) post record profits, (US$579 million in fiscal year 2000) because it is not in the best interest of the market at this present time. If Gardiner is saying something otherwise, I would ask him to respond, not in economic, but in human terms.

From a purely economic perspective, the fact that the current minimum wage does not allow for one adult to meet their basic needs is a clear indication that there is a market failure, and that is bad economics.

Has the above writer ever tried to live on the Indonesian minimum wage? Having attempted to do so myself in Tangerang during August 2000 as a show of solidarity with Nike factory workers, I would suggest that he does not have the slightest clue of the human reality of trying to survive on the legal minimum.

My colleague Leslie Kretzu and I gave Nike (and in a sense the entire manufacturing industry) the benefit of the doubt and lived on the highest basic wage being paid at Nike's contract plants at the time, Rp 325,000.

The result: I lost 25 pounds living in a rat-infested slum, surrounded by open sewers and burning garbage. I came away from this experience with the strong belief that the only just thing to do (and I use the word just here strongly, given the U.S. recent calls for global justice in dealing with our current issues), is for companies to pay a wage that is fair.

Article 25 of the United Nations' Universal Declaration on Human Rights provides a benchmark of a wage: "Everyone has the right to a standard of living adequate for the health and well- being of themselves and their family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age of lack of livelihood in circumstances beyond their control."

Clearly the wages being paid by these manufacturers do not meet the definition above. What I have consistently offered to Nike executives, I will offer to you Mr. Gardiner. Come live in Tangerang on the minimum wage with me for one month. Then we will see if your beliefs about what is best for workers, the market and economic development does not significantly change.

Educating for Justice is a non-profit group currently focusing on improving Nike's labor practices in Indonesia. The writer can be reached through www.nikewages.org.