Labor disputes

Labor disputes

Six thousand workers went on strike recently in one of
Indonesia's largest garment factories to demand higher wages. At
the same time we hear calls from high government officials and
intellectuals to redress the social imbalances in this country as
the situation could easily become volatile.

One way to deal with social inequalities and avoid labor
disputes would be to pay workers decent wages so that they can
provide for themselves and their families. The argument from the
company's managers that they are already paying the workers Rp 75
more than the daily minimum wage for workers in West Java is
frankly ridiculous. What can one get with Rp 75 these days? A
meager salary of Rp 4,675 per day is not an incentive to work
hard and probably workers earning this amount cannot even feed
themselves properly.

One of the reasons often given for keeping salaries at such
low levels is that productivity in Indonesia is low compared to
other countries. However, there are ways to improve that
situation and one of them is by introducing profit-sharing
schemes with workers who, as a result, feel more stimulated to
improve their performance as well as their skills, productivity
is given a boost, and the company's revenues are positively
affected.

I remember reading an article years ago in the Harvard
Business Review whereby a bankrupt company in California was
bought by two young businessmen who within a year doubled
productivity and made large profits. How? Through profit-sharing
with workers, plus giving them bonuses and incentives (such as
weekends in a nice hotel) for being creative on the job and
finding new ways of working more efficiently. Having inherited a
dispirited team, they turned it into a highly competent one.

OLVIA REKSODIPOETRO

Jakarta