Indonesian factory workers strike, demanding pay hikes

Featured - October 4th, 2012
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Tens of thousands of Indonesian factory workers went on strike to demand higher wages, underlining the deep-seated labour problems in the country.

The one-day strike called for better enforcement of the country’s labour laws, including revisions to a legislation which allows companies to hire temporary workers on one-year contracts without benefits, also known as “outsourcing” in Indonesia. Protesters in Indonesia’s eastern city of Makassar compared “outsourcing” to “modern-day slavery”.

Workers opposed the government’s proposal for workers to contribute 2% for health-care premiums and ultimately demanded an increase in the minimum wage. More than 700 companies were affected by the protests, police spokesman Col. Agus Rianto told AP. Unions have threatened to stage a massive strike across the country if the current demands aren’t met by January.

According to the Wall Street Journal, Indonesia’s labour problems could affect the country’s investment climate, amid strong economic growth. Protests could drive away foreign investors or relocate businesses to Southeast Asia, where economies are growing rapidly. The Indonesian Chamber of Commerce (KADIN) claimed that contract workers were a necessary part of doing business in Indonesia and that it is “inappropriate” to ban the practice.

Mooryati Soedibyo, a KADIN advisory board member, told The Jakarta Globe that the government needed to listen to both sides. “Business people should be given easy access in doing business, while workers’ demands for welfare improvement should also be implemented,” she said.