Workers feel the pinch post fuel price hike

Ridwan Max Sijabat, The Jakarta Post, Jakarta

For his work at a shoe company in Tangerang, Banten province, Parluhutan Simbolon is paid Rp 1.3 million (US$103) a month, a wage he once considered decent. But since the government raised fuel prices on Oct. 1, it has been a struggle to make ends meet as the prices of basic goods have also increased.

Parluhutan's wife is out of work and the couple live with their two children in a four meter by six m rented house in Pasar Kemis, some two kilometers away from his workplace. Like other low-income families, they have cut back this month.

"We consume two packets of instant noodles for breakfast and another two for dinner almost every day, and my wife prepares rice with salted fish and vegetables for lunch. We use kerosene for cooking" he told The Jakarta Post here on Thursday.

He said he walked to his workplace to save on transportation costs and worked overtime three days a week to save for the school fees of his children, who attend a nearby state elementary school.

His recent efforts to apply for a fuel compensation card and financial aid for his children's education were fruitless.

His company's management, who recently laid off a number of workers, made the announcement last week that the annual Idul Fitri bonus would be late due to increasing production costs.

Many workers of shoe and clothing factories in the district have sent their wives and children back to their villages in Sumatra, Central and East Java, as living in the capital has become too expensive.

According to data from the Manpower and Transmigration Ministry, some 13,000 low-paid workers employed in labor- intensive factory jobs have been dismissed since the first fuel price increases in March of this year.

Chairman of the Indonesian Employers Association (Apindo) Sofyan Wanandi acknowledged that the fuel price increase policy had increased the hardships of low-paid workers, particularly as employers could not easily increase their salaries with tougher business competition both at home and on the overseas market.

"Indonesian products' competitiveness, both at home and overseas, has dropped and this has brought negative implications for workers' financial situations because their purchasing power will certainly go down while their monthly income does not improve," he said.

He cited a number of textile and garment companies on the outskirts of Jakarta, Bandung and Central Java, and sawmills in Kalimantan and Sumatra, which had laid off their workers because of the soaring prices of imported raw materials and decreasing orders from foreign brand owners.

He said many employers had only raised transportation and meal allowances.

Sofyan said Apindo had sent a letter to President Susilo Bambang Yudhoyono, asking for the elimination of illegal levies and annulment of 3,000 contentious bylaws that are detrimental to businesses, to enable employers to pay the annual bonuses and raise the workers minimum wage by around 13 percent in January.

He said only large or successful companies were able to pay the annual bonus to Muslim workers this year, while small companies had been urged to negotiate with their workers over the bonus.