Other statistics illustrate the impoverishment that is now all too real for a growing number of Indonesians. According to the Central Bureau for Statistics, in 1996 the average Indonesian spent half of his daily income on food. Today, 65% of what he earns is spent on sustenance alone. The Health Ministry says some 7 million babies are malnourished. More than 40% of the 94 million-strong workforce are jobless or underemployed. Even if the economy grew by 3.5% this year - a very optimistic estimate - it would not absorb all of the 2 million workers who enter the labour force every year.
It seems only just, then, that the government has stepped up minimum wage increases, now determined by local administrations instead of the central government. Minimum wages are skyrocketing across Indonesia, increasing, for example, by 66% in East Kalimantan.
Factories are up in arms about the pay rises, arguing that during a time of declining orders, they simply can't afford any extra expenses. The textile industry, employing some 1.2 million people, has threatened to lay off 100,000 workers, because its revenues fell 20% in 2001, and are expected to decline another 25% this year. With fuel and electricity
prices, as well as telephone tariffs, due to increase by about 20% this year, "more companies will go bankrupt if we have to bear the burden," complains Anton Tardia, chief of the Indonesian Footwear Association. The business community says it should determine wages with its employees and the government should stay out of the factories' disputes with unions. "The wage system should be determined in a bipartite fashion, and determined according to sector," says Aburizal Bakrie, head of the Indonesian Chamber of Commerce.
But labour unions are increasingly assertive after decades of government censorship, and are gearing up for a showdown. The hard-line National Front for Workers' Struggle, or FNPBI, promises protests and strikes if companies don't pay the new wages. Riots broke out the last time workers took to the streets in great numbers last June, demonstrating against what they saw as anti-labour regulations. "We believe many of the companies can afford the wage hikes, but are pretending that they can't," says FNPBI leader Dita Sari. It is unjust for workers to bear the brunt of the country's errors, says Warsito, 29, a union leader at the factory where he works. "We feel that we are paying for other people's mistakes."
These workers, many of them currently earning only US$40 a month, have the sympathy of some government officials. "With the rupiah at this (low) rate, the minimum wage here is still considered one of the lowest in the region," says Rini Soewandi, Minister for Trade and Industry. More proof of the government's pro-labour orientation is the allocation of 20% of development spending to education, says Soewandi.
Soewandi wants to avoid the influx of newly unemployed into the informal sector, which already accommodates most of Indonesia's working-age population, for not very much pay.
But with factories intent on laying off workers this year, such an influx seems inevitable. Says Tubagus Feridhanusetyawan from the Center for Strategic and International Studies: "Life is getting tougher in the informal sector."