Mass Dismissal Threatens Workers

By : Sapariah Saturi Harsono

THE U.S.-triggered global financial crisis at first only hit Jakarta’s financial sector. But now this global crisis began to hit the real sector. It lowered market demands from the U.S. and Europe. Domestically, it also weakened consumers’ buying power. They make things very difficult for the business sector.

Crude oil price had decreased, from US$147 per barrel in July 2008 to only $42 last month. It also lowered the prices of agricultural produces. The Indonesian rupiah also weakened, going down from around 10,000 to the American dollar to 12,000 in the last three months. Liquidity is also an issue. It badly affects the real sector.

The crisis also prompted many industries to reduce their production down to 30 percent in a bid to reduce their financial burden. Workers dismissals take place more and more frequently, especially among the labor-intensive industries such as plantation, garment, construction etc. In 2009, several institutions estimated that around one million workers might lose their jobs.

The government tried to anticipate this mass dismissal. Four ministers –Home Affairs Minister Mardiyanto, Man Power and Transmigration Minister Erman Suparno, Industry Minister Fahmi Idris and Trade Minister Mari E. Pangestu—jointly issued a new regulation. It tried to keep economic growth. One of their points was to allow bi-partite decision in setting wages: only the company and the workers. Many unions protested the joint decree, saying that it might be exploited by employers to lower wages.

Meanwhile, mass dismissal is taking place. Ade Sudrajat Usman of the Indonesian Textile Association said that employers do not have other options as demands from the U.S. and Europe had decreased significantly. More than 50 percent of Indonesia’s textile are exported to the U.S. and Europe.

So, according to Usman, they have no other option but laying off their workers. About 100,000 textile workers are going to lose their jobs between November 2008 and March 2009.

The government is expected to anticipate these mass dismissal. The government has promised to spend Rp 100 trillion to cushion the dismissal. It will be spent on infrastructure construction, social network program, small business credit etc.

They are good promgras. But they are still on paper. Sofjan Wanandi of the Indonesian Employers Association (Apindo) called on the government to implement these programs as soon as possible, saying that it will help solve the dismissal. “The slowing down of our economic growth forced industries to cut production 20 to 30 percent, making mass dismissal unavoidable.”

If the stimulating funds are to materialize, the dismissed workers could immediately work in the government-financed programs.

Wanandi’s Apindo predicted that 500,000 to one million workers will lose their job this year. Last year, 100,000 workers already lost their jobs.

From: Indonesia Rising, 5 January 2009