Workers' share of revenues remain low

Workers' share of revenues remain low

YOGYAKARTA (JP): Workers' share of national revenue remains
low although the government has set the level of minimum wages,
economist Kwik Kian Gie said yesterday.

In a seminar titled Humane Economic Development, Kwik said
company managers' concern that higher wages would result in
bankruptcy have no sound rationale.

Some companies fear that raising wages will result in
automation, which could trigger higher unemployment.

"This 'master' mentality is groundless because it believes
that if workers' wages are raised then income and purchasing
power will rise," he said.

The one day seminar at Muhammadiyah University was opened by
Muhammadiyah chairman Amien Rais. It also featured local
economist Revrisond Baswir of Gadjah Mada University.

Kwik said the large number of workers would increase their
purchasing power if they were well-paid. This would create a
positive ripple effect toward a greater need for goods and
services, an expansion of factory space, more investment and an
improved economy.

He said one example was high workers' wages in developed
countries, which experienced increased economic growth.

Kwik said overly high wages would result in automation and
trigger unemployment like what happened to West European workers
in the 1970's.

"But in a country where national revenues for workers are low,
increases in their pay would stimulate the economy," he said. He
added that business executives would initially be reluctant to
share their large profits with workers.

Kwik said Indonesian workers are yet to receive their due
respect as they have been prevented from forming labor unions and
the leader of the independent Prosperous Labor Union Muchtar
Pakpahan may be jailed for subversion.

He said the Ministry of Cooperatives and the House of
Representatives are yet to understand the noble obligations
placed on them to help workers.

"The budget allocated by the Ministry of Cooperatives and
small business development for programs aimed at improving
workers' prosperity is meaningless," he said.

Meanwhile, Amien Rais said the political elite in developing
countries, including Indonesia, are servants of multinational and
transnational companies.

Amien, chairman of the 28-million member Muhammadiyah Islamic
organization, said these servants or kompradors ignore the
public's interests as a result of their alliance with
multinationals.

"Intellectuals must prioritize viable alternatives to prevent
the public from being increasingly pushed aside by the global
economy's power plays prompted by multinationals and
transnationals," he said. (23/01)