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REEBOK, NIKE, AND LEVI STRAUSS ON THE PROWL FOR CHEAP LABOR
IN INDONESIA
by Peter S. Goodman
Tini Heyun Alwi is not sure exactly how much a shopper
in America must spend for a pair of the Reebok sneakers she and her co-workers
assemble each day by the tens of thousands, but she figures it's a lot.
"I think maybe I could work for a month and still not be able to buy one pair," says Tini, who works on the assembly line of the Dong Joe shoe factory at an industrial estate in Tangerang, just outside Jakarta, Indonesia's teeming capital. A look of wonder crosses her nineteen-year-old-face at the strangeness of the thought as she sits cross-legged on the floor of the squalid one-room shack that is her home.
The room is no larger than many a closet in the West, but Tini shares it with another woman to keep costs down. Neither owns a mattress or a bed, so they sleep on the floor. The moist tropical air is disintegrating the walls, just bundles of newspapers fastened together with glue and string. Mosquitoes enter at will, floating like confetti around a dim light bulb hanging bare from the plywood ceiling.
One month's worth of Tini's earnings actually falls far short of the retail price abroad for a pair of the trendy, leather athletic shoes she stitches together. Six days a week, Tini works a ten-hour shift inside a poorly ventilated factory in stifling heat, each day earning the princely sum of 2,600 Indonesian rupiah ($1.28). Throw in forced overtime two to three times a week at another 300 rupiah (fifteen cents) per hour and Tini's monthly wage comes to about $39, a far cry from the $110 that a single pair of Reeboks can command in the United States.
This is the arithmetic behind Southeast Asia's economic boom, and Indonesia has learned the equation particularly well. Lured by cheap, abundant labor, investment capital has poured into the archipelago--more than $18 billion over the last three years alone-- much of it into shoes, textiles, garments, and other export-oriented manufacturing sectors. Such major American brand names as Reebok, Nike, and Levi Strauss--always on the prowl for cheaper labor markets free of unions and safety codes--have descended on Indonesia.
The corporations prefer not to do their own manufacturing; they stick to advertising, distribution, and product development, while contracting with Third World factories to churn out their products at rock-bottom cost.
Once a backwater, Indonesia has been transformed into one of the fastest-growing economies in the world. Like mushrooms after rain, clusters of modern skyscrapers have popped up out of the smog-encased sprawl of the capital, most of them owned by banks and trading houses. A glut of chauffeured luxury sedans brings Jakarta traffic to a standstill during rush hours, ferrying the wealthy from their air-conditioned split-level houses in the suburbs to their air-conditioned downtown offices in the sky.
Meanwhile, at industrial estates like Tangerang, exhausted laborers like Tini keep the export machine cranking, working around the clock for minuscule wages in factories lined up one after the other.
President Suharto took power in a brutal coup a quarter-century ago. Though avowedly nonaligned, Suharto has strived to cultivate and maintain good relations with Washington, successfully harvesting the fruits of his labor: Indonesia received some $45 million in economic development aid from the United States last year alone and another $1.9 million in military-training aid. Indonesia's armed forces have bought hundreds of millions of dollars worth of military equipment and arms from U.S. manufacturers, using their purchases to dominate the archipelago.
Indonesia, composed of several hundred ethnic groups scattered over more than 13,000 islands, is a fragile patchwork nation. Generals rule the archipelago with an iron fist, as the people who live in places like East Timor--the former Portuguese enclave that Indonesia invaded in 1975 and has been struggling to assimilate ever since--can attest; as many as 250,000 East Timorese, almost one-third of the population, have been killed by the army. Such carnage occurs in the Indonesian provinces of Aceh and Irian Jaya as well.
Washington likes Indonesia much the way it is, though State Department officials do have to weather the awkward fallout from the occasional massacre their friends in Indonesia inflict on some unknown people in some remote corner of the archipelago (as occurred in November 1991 in East Timor, when Indonesian troops gunned down as many as 200 pro-independence demonstrators). But stability, Indonesia-style, has made it possible for U.S. corporations to enjoy their access to Indonesia's abundant natural resources--a treasure trove that includes large oil deposits, gold, and vast hardwood forests --in an environment free of threat. It has also provided these corporations with a labor force that is not only exceptionally cheap by any standard but also eminently exploitable.
The Ministry of Manpower is supposed to safeguard the welfare of workers, but it operates instead much like a brokerage house for employers. The Ministry does mandate minimum-wage laws, but these wages guarantee workers enough earnings to provide for just 68 per cent of their basic physical needs--this statistic according to the Ministry itself. And even these laws are rarely enforced. Almost half of Indonesia's factory workers receive less than the minimum wage, according to several surveys conducted by Indonesian and Western labor advocacy groups.
A combination of fear, ignorance, and extreme poverty makes for a work force that is generally reluctant, if not powerless, to press for its legal rights.
Many laborers, fresh from rural village life and innocent of the ways of the modern economy, are amazed that someone is willing to pay them cash at all. Few have any comprehension of the scale of the profits their labor is generating for their employers. Many do not know there is a minimum wage. Others see that they are being denied their due, but feel powerless to take any action.
Twenty-three-year-old Rubane Tukimen left his village in dirt-poor East Java several months ago "to search for adventures and experiences," he said. His red-and-white T-shirt identified him as a worker at the Nasa factory in Tangerang, a factory where Nikes are produced. Robane and his co-workers are automatically charged 500 rupiah (twenty- five cents) per day for the meal they receive during their work shifts. With a daily salary of 2,300 rupiah ($1.13), he earns less than the minimum wage, though with the 500-rupiah "food allowance" included as salary, the company is able to convey the appearance of complying with the law.
"I've got enough money to buy my rice, but not for much else," he says.
Labor in Indonesia is cheap, after all--so cheap that it costs an employer less to hire uniformed goons to rough up would-be labor activists than to negotiate.
For human-rights activists like Princen, who has tried with little success and much government harassment to organize an alternative labor union, negotiation is the key.
"We're not against free markets and we're not against foreign investment," he says. "This is a very poor country and clearly foreign investment is critical. But you have to give the workers a chance to bargain for a better deal. That's how free markets are supposed to work."
Source: The Progressive, June 26, 1993
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