Rapid economic growth passes workers by

Rapid economic growth passes workers by

By Ridwan M. Sijabat

JAKARTA (JP): The Indonesian economy recorded an impressive
7.3 percent growth this year, but many of the country's workers
are probably not impressed by this performance.

The bottom line: their prosperity has hardly improved.

The labor front has been calmer in 1995, with far fewer
strikes and no major labor conflicts to speak of, specially when
compared with 1994 and 1993. This calm hides the fact that the
condition of workers has hardly improved over the last 12 month
period.

True, the government hiked minimum wage levels in all 27
provinces by an average of 20 percent this year, which more than
compensated for an inflation running at just under 10 percent.
But this is an improvement only for workers who are earning the
minimum subsistence level.

Labor leaders said that overall, the welfare of workers had
not improved at the same pace as the nation's rising prosperity.

"The 7.3 percent growth should be seen as workers'
contribution to the national development. So far, we have not
seen our workers partaking in the fruits of their labor,"
Wilhelmus Bokha of the All Indonesian Workers Union (SPSI) said.

Most analysts put this down to the country's weak and almost
ineffective trade union movement, something which Indonesia
desperately needs to revamp now more than ever as it is shifting
into full gear with its industrialization program.

All eyes turned to the SPSI when it held its congress near
Jakarta in November. As the only organization allowed by the
government to represent workers in negotiations with management,
a lot of hopes were placed on the union to improve the condition
of workers.

President Soeharto, in addressing the congress, emphasized the
importance of empowering workers; improving their skills and
productivity to prepare Indonesia for industrialization and the
fiercely competitive global trade.

The SPSI has, at least, made an initial step at the congress:
The union formally reverted back to its old format as a
federation of trade unions and its leadership pledged to do its
utmost to strengthen the workers position vis-a-vis management.

There were 13 sector unions at the last count but the number
could increase. If these unions have their way, the government
would soon have to set the minimum wage level not by region as at
present, but by profession or sectors, such as banking, trade,
and textile.

Each of these 13 unions is now studying what should be the
minimum wage for its members. The trade unions in electronic and
wood industries, for example, are talking about a minimum daily
wage of Rp 10,000 for their members.

If the SPSI is seen as failing to do its job, it is because
the union is operating in a political environment that still
harbors suspicions against any labor movement, a trauma from the
1960s when trade unions were mostly fronts for communist
movements.

Because of this, despite official pronouncement that workers,
and therefore the unions, are partners in development along with
management, Indonesian workers are still being denied their
rights, analysts said.

For example, the regulation requires companies employing more
than 25 workers to allow for SPSI representation, and sign a
collective labor agreement detailing workers' rights and
obligations. The SPSI's data shows that only 11 percent of 67,000
companies have signed such agreements.

The SPSI has been ineffective in representing workers'
interests, let alone in fighting for them, in conflicts with
employers. The SPSI's own data found that of 10,000 labor
disputes over the last five years, only 1 percent to 2 percent
were mediated by the union.

Its ineffectiveness has allowed for the emergence of non-
governmental organizations, including the Indonesian Prosperous
Labor Union (SBSI), to fill in the vacuum. SBSI has even been
challenging the government's one union only policy.

It was just as well that there were fewer strikes this year --
200 strikes compared to 500 strikes in 1994 and 1,700 strikes in
1993.

Plaudits should go to the government for this because of its
constant nudging of companies to comply with the minimum wage
regulations -- the main source of labor conflict in previous
years -- or face court action.

Most of the strikes this year were disputes over workers'
allowances, overtime payment, bonuses and severance pay -- things
which could have been avoided if companies had signed collective
labor agreements with their workers in the first place.

Former SPSI chairman Imam Sudarwo said the government's union
policy, including its insistence on one union only, is too
restrictive.

Imam said the government should allow workers the freedom to
set their own unions. He noted that the government has been half
hearted in clamping down on companies who violate labor laws.

SBSI chairman Muchtar Pakpahan argued that Indonesia should
learn to respect workers right to associate if it wants to become
fully industrialized and competitive in the global market.

Budihardjono, a member of the House of Representatives with a
strong interest in labor affairs, agreed that the government has
been too harsh on workers while somewhat lenient on companies,
the ones that are violating the labor laws.

He noted that the 1992 Law on Workers Social Security, which
compels companies to provide social security insurance for their
workers, has not been fully upheld, yet no companies have been
punished.

PT Astek, the state-owned company which provides the social
security insurance program, said only 52,000 out of 144,000
registered companies in Indonesia have enlisted their workers in
its Jamsostek insurance program. The number of workers covered by
Astek is 7.7 million out of an estimated 30 million fixed income
workers in Indonesia.

In terms of media publicity, the government has been quieter
this year, compared to 1994 and 1993, when it comes to promoting
the condition of workers in Indonesia. This does not mean that it
has sat idly this past 12 months.

Minister of Manpower Abdul Latief took most of the credit in
1993 and 1994 for a series of measures to strengthen workers
position, including sharp hikes in minimum wages, regulations
ending military intervention in labor disputes and automatic
Christmas and Idul Fitri bonuses for workers to name but a few of
the things he did. For him, 1995 has been more of a consolidation
year, seeing through the implementation of these measures.

This year, he turned his attention toward long-term programs,
such as revamping the government's vocational training centers,
establishing industrial apprenticeship programs, as well as a
host of other programs. All of these are designed to strengthen
the skills of Indonesian workers and make the country's human
resources more productive and competitive.

Latief has instituted an automatic yearly revision of the
minimum wage levels; to rise to at least commensurate with the
inflation rate. As far as he was concerned, there should no
longer be disputes over minimum wage levels, and he expected most
companies to pay their workers above these levels. "The minimum
wage is the lowest pay level. It only applies for small companies
and unmarried inexperienced workers."

His office has also stopped giving companies warnings for
violating minimum wage levels. They are prosecuted in court. This
year, 48 company owners were fined between Rp 75,000 and Rp
750,000 for violating the minimum wage regulations.

Yet, there is hardly time for complacency for Latief as the
minister who is most responsible about Indonesia's unemployment.

Indonesia's jobless rate, as the minister himself has
admitted, ranges between 4 percent and 40 percent, or between
3.6 million and 33.3 million of the work force, depending on how
many of those who are underemployed are included.

Whichever definition is used, the government also has to take
into account that each year, approximately three million young
people are joining the labor market.