Wednesday, February 10, 2016

INDONESIA:::Job insecurity, new minimum wage rile workers

JAKARTA -- Indonesians are taking to the streets over slower wage growth and fears of job losses amid reports of well-known foreign companies leaving.
     Labor protests usually heat up around November, the time when the following year's minimum wages are set. Unions nevertheless mobilized thousands to march Saturday through Jakarta near one of the nation's presidential palaces. Their grievances included mass layoffs.

     The Confederation of Indonesian Workers Unions deployed a total of 30,000 demonstrators across multiple cities, according to Chairman Said Iqbal. They aimed mainly to pressure employers on layoffs and to force the scrapping of last year's changes in how minimum wages are determined.
Jobs down the drain
With slowing economic growth denting corporate earnings, Indonesian workers have faced waves of layoffs recently. The pace of expansion in real domestic gross product slowed for a fifth straight year in 2015. The unemployment rate hit 6.18% in August as mainstay industries like coal and palm oil have struggled and margins at clothing and machinery manufacturers have worsened. When President Joko Widodo took office in October 2014, supporters harbored high expectations of improvement. But the jobs situation continues to deteriorate.
     Headline after headline trumpets such developments as Ford Motor deciding to leave and Toshiba selling an Indonesian television plant to a Chinese company. The reports are at times overblown -- Ford does not even build autos in Indonesia, though it does sell them here. But workers' fears have spiked on news of layoffs by the likes of Panasonic and Chevron.
Pay dirt
Workers are also unhappy with a minimum-wage regulation Widodo signed off on last October. Under the old system, each provincial governor approved a wage negotiated by government, management and labor representatives. That regime came under criticism when Jakarta's minimum wage jumped 44% on the year in 2013.
     Now, the minimum wage is set under a formula that factors in inflation and economic growth. Jakarta's new rate for 2016 is 3.1 million rupiah ($227) a month. The 15% year-on-year increase far exceeds the 3.35% inflation rate of 2015.

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