Jobs in footwear industry drop by almost 60 percent
Jobs in footwear industry drop by almost 60 percent
Zakki P. Hakim, Jakarta
Over 180,000 people in the footwear industry lost their jobs last
year, and many of them may have returned to traditional
agriculture, according to the latest government data.
The 2003 National Labor Force Survey report (Sakernas)
published by the Central Statistic Agency (BPS) recently,
stated that the number of jobs in the footwear industry plunged
by 58.70 percent from 310,000 in 2002 to 128,000 last year.
"Many footwear factories have closed down (partly) due to weak
investment climate," Aden Gultom, head of the BPS workforce sub-
directorate explained to The Jakarta Post over the weekend.
Aden said that the footwear industry was one of the top three
industries contributing to the decline in the number of jobs in
the manufacturing sector last year, falling by 9.76 percent to
10.93 million from 12.11 million in 2002. The number of jobs in
the furniture industry and non-mining industry also fell.
Unfavorable labor regulations, which have forced companies to
rapidly increase the minimum wage at a time when both exports and
domestic sales are weak has caused some firms to leave the
country or reduce their staff, experts said.
"The minimum wage increase has been too fast," said Bambang
Widianto, labor analyst at the National Development Planning
Agency (Bappenas).
The minimum wage in Jakarta, which was Rp 231,000 in 1999
jumped by more than 150 percent to Rp 591,266 by 2002. Last year
it rose to Rp 631,000, and the Jakarta administration increased
it again by 6.3 percent to Rp 671,550 for this year.
Bambang said that the government should move quickly because
labor-intensive factories such as in the footwear industry, were
one of the best ways to resolve the pressing unemployment problem
here as around half of the country's more than 100 million
workforce have just an elementary school education.
He suggested that the government ease existing labor
regulations, particularly those that make investment into labor-
intensive projects costlier.
Aden added that many of the workers who lost their jobs in the
manufacturing sector moved to the agriculture, forestry and
fishery sectors, which last year absorbed about 1.5 million new
workers.
Chatib Basri, an economist from the University of Indonesia,
said the data further confirmed that a "deindustrialization" of
the economy was taking place, wherein people from the formal
manufacturing sector were moving back to pre-industrial jobs like
farming and fishing.
Chatib offered a solution that instead of continuing to
increase the minimum wage, the government should work together
with companies to provide affordable accommodation near
factories.
Major concerns in a worker's life are often the costs of
housing and transportation, he said.