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.