Nearly 2.8 million irate blue-collar workers staged a labor strike across 24 cities in Indonesia on Wednesday to protest standard minimum wage and employers’ favoring of cheap outsourced labor – which leaves scant full-time salaried positions while offering little job security to contractors in the country.

The initial 23,000 demonstrators congregated in the greater Jakarta area, the capital city’s CBD, at 7am, and performed a sweep of nearby factories; urging more of their fellow factory-worker, for whom average monthly salary is just over $120, to take to the protest lines.

“[The] system causes huge losses to the workers,” Andi Mallanti, of the South Sulawesi chapter of the Indonesian Workers Welfare Union (SBSI), told The Jakarta Globe. “They work through a third party and [can be] fired without compensation.”

Government failure to act

Indonesia’s Constitutional Court had ruled in January against the practice of hiring contractors but enforcement of the law has yet to be instituted. Consequently, many SMEs and major factories have continued to hire workers on one-year contracts without penalty.

The government set a deadline of September 15 for reviewing outsourcing practices and revising the remuneration system; however, when the time came with none of the promised follow-up, labor unions felt a strike was justified.

“We have waited long enough for solutions but nothing has been done,” said Mudhofir, the Chairman of the Confederation of Indonesian Prosperous Labor Union (KSBSI), who billed the protest action as “unavoidable.”

The purportedly exploited workers sought also a raise in standard minimum wage – which had only been hiked to $169 this January in Jakarta, the capital city, in response to a protest on January 27 during which thousands of workers had obstructed the Jakarta-Cikampek interstate toll road – the provision of social security and health benefits for contractors, and to oppose the policy of a 2 percent cut from their already meagre salaries for health insurance.

“Today’s strike is a warning to the government to act quickly and firmly to respond to what workers want,” union member Nining Elitos told the Agence-France Presse news agency. Protestors and labor union coordinators concur, affirming that Wednesday’s demonstration is but a warm-up act, should the government continue to feign ignorance.

“We are serious about holding strikes until the government listens to our demands. We are waiting for immediate solutions to the chronic issues,” Said Iqbal, Chairman of the Confederation of Indonesian Workers Union (KSPI) told The Jakarta Post.

Protest coordinators advised confining the demonstrations to the vicinity of local legislature compounds; however, the approximately 30,000-strong procession in Jakarta spilled into the compound of the national monument, Hotel Indonesia traffic circle and outside the offices of the Ministry of Manpower and Transmigration and the Ministry of Health.

Can economic growth be a hindrance?

Minimum wage standards have not adjusted apace with Indonesia’s 6.4 percent GDP growth in 2012. The struggle to budget is only made worse by the perrenial inflation caused by a bloating of food prices impending the Islamic Ramadan period in August.

However, a workforce lacking in core competencies, such as a secondary education (50% of the labor force holds an elementary school certificate or lower, while only 5% are degree or diploma holders), are in a weak position to demand a competitive remuneration. Indonesia’s human resources capital does not, at present, lend itself to ambitious economic objectives without outsourcing or creating a huge imbalance in salaries between the educated and the uneducated.

Image Courtesy of  fulili / Shutterstock.com

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