The Like Cutting Bamboo report (September 2000) found
that workers' wages were well below what they needed to meet their
basic needs and that they were heavily dependent on overtime income.
It also found that workers with children were in a particularly
dire financial position.
Since then research funded by Nike itself has considered the
adequacy of Nike workers' wages in Indonesia. In February 2001
Nike released a report titled "Workers' Voices: An Interim Report
of Workers' Needs and Aspirations in Nine Nike Contract Factories
in Indonesia". The research was funded by Nike, arranged by the
Global Alliance for Workers and Communities, and conducted by
the Center for Societal Development Studies at Atma Jaya Catholic
University in Jakarta. It found that most workers in Nike contract
factories were paid at or above the official regional minimum
wage, which was then about Rp 286,000 (US$32.9) [4].
It recognised, however, that in most Indonesian provinces the
minimum wage was below the government's own estimate of the minimum
cost of living for a single male, forcing workers to rely on income
from overtime. When overtime and bonuses were included the average
monthly salaries in the nine factories rose to between Rp 471,550
(US$54) and Rp. 614,150 (US$70.6). Even with overtime pay adding
so significantly to workers' income "over half" of the focus group
participants reported that their wages were "low and not sufficient"
[4].
Workers interviewed for this report strongly emphasised that wages
continue to be inadequate. Workers interviewed in July 2001 were
being paid a base wage of between Rp.426,000 ($US37.50) and Rp.500,000
($US44) per month. The wage slip pictured is that of Ngadinah
from the PT Panarub factory (Adidas). It shows that in a three
week period between 9 and 30 November 2001 she was paid a base
wage of Rp.343,000 ($US32.50) plus two additional allowances which
totaled Rp.33,600 ($US3.16). An amount of Rp.11,130 ($US1.05)
was then taken out to cover her government mandated health insurance
(Jamsostek) and other costs, leaving her with Rp.365,700 ($US34.50)
for the three weeks. Her weekly income in this period therefore
was Rp.121,900 ($US11.50) and she had to survive on Rp.17,414
($US1.65) per day.
In January 2002 the legal minimum wages in most Indonesian provinces
rose significantly, in some by as much as 38%, to help workers
afford price increases associated with reductions in government
fuel subsidies. Workers in the Nike and Adidas factories researched
are now earning a base wage of between Rp.565,000 ($US56) and
Rp.590,000 ($US58.50) a month. According to the workers who participated
in focus groups in January 2002, however, prices have risen faster
than wages and so their economic situation has not improved. The
government raised fuel prices by an average of 22 percent on 17
January but in the preceding months the price of basic goods like
rice and kerosene had already risen dramatically due to hoarding
in advance of the removal of the subsidy (Jakarta Post
2002b). On 9 January the Jakarta Post reported that the
price of kerosene had "risen drastically". In West Java, where
most Nike and Adidas contract factories are located, the price
of rice had risen from its usual level of Rp 2,600 ($US 0.26)
per kilogram to between Rp 2,800($US 0.28) and Rp 3,200($US 0.32)
per kilogram. The price of palm oil had risen to Rp 3,500($US
0.35) per kilogram from the normal Rp 2,800($US 0.28) (Jakarta
Post 2002b). Workers from the Panarub factory in Tangerang,
West Java reported in a focus group discussion on 21 January that
by then the price of rice at the cheapest market had jumped again
to Rp.4,000 ($US0.40), an increase of 50% on its price six months
before. They also said that over the same period the price of
eggs had gone up from Rp.6,000($US0.60) to Rp.8,000 ($US0.80)
per kilogram, a 33% increase [5]. Early
in February 2002 Java was hit by massive floods, the economic
cost of which is likely to be in the hundreds of millions of dollars.
The floods caused extensive damage to crops and transport systems
(roads and bridges) resulting in another jump in food prices (Business
Times 2002).
Recent reductions in overtime have further reduced any benefit
from the new wage increase. As mentioned in the previous section
workers rely on overtime income in order to meet their basic needs
and have some money for saving. In July 2001 a single worker who
lived in a factory dormitory and ate meals provided by the factory
reported that when working a lot of overtime some months she was
able to save as much as Rp.100,000 ($US9.70). In January 2002
a focus group of six single workers from the same factory responded
to a question about how much they were able to save with ironic
laughter. They instead described how it had become necessary to
borrow money towards the end of each month until their monthly
pay came through.
The situation is worst for workers with children. The inadequacy
of their wages makes it extraordinarily difficult for them to
support their families. In some factories single workers willing
to live eight to a room are able to take advantage of free dormitory
accommodation at the factory. That option is not open to workers
with families. The Nike-funded Global Alliance research into conditions
in Nike contract factories in Indonesia noted in February 2001
that:
In the focus group discussions, when workers were asked
why they sometimes feel sad, some young parents reported living
separately from their small children. Those workers explained
that due to the lack of affordable child care options and high
cost of schools in the greater Jakarta area, they were forced
to leave their children behind in their hometowns with extended
family (Center for Societal Development Studies 2001, p.20).
One of the aims of the research conducted in July 2001 and January
2002 for this report was to get a sense of what proportion of
Nike and Adidas workers with children find it necessary to live
separately from them and how that impacts on those workers and
their families. Approximately 28 percent of workers in Nike contract
factories in Indonesia are parents (Center for Societal Development
Studies 2001, p. 20). The thirty-five workers who were either
interviewed or who participated in focus group discussions with
the author were asked for their estimate of what percentage of
parents working at their factories are forced to leave their children
with relatives in their home village. Thirty estimated that more
than half left their children in the village. Of the remainder,
one estimated fifty per cent, one estimated forty per cent, and
the other three found it difficult to estimate but said "a great
many" workers at their factory lived apart from their children
[6].
Evidently most workers in this situation can only afford to
visit their children every one to six months, depending on the
distance from the factory to the village. Most workers from islands
other than Java only see their children once every couple of years.
One worker interviewed had a 3-year-old daughter, and he and his
wife could only afford to see her once a month. Naturally they
found the separation extremely painful. All workers strongly agreed
that if their wages were adequate to meet the basic needs of a
family or if the factory provided childcare the vast majority
of workers would prefer to live with their children.
Currently those workers who choose to live with their children
take on an enormous financial burden. One worker had a 1-year-old
son and described how he and his wife had been forced to take
out a loan to cover her living expenses while she looked after
the baby. They live hand to mouth, frequently having to buy food
on credit between pay days. Another worker interviewed in July
2001 had a sister who also worked at the factory. The sister had
a 3-year-old son and was in a very difficult financial situation.
She had to pay a neighbour Rp.60,000 per month to look after her
son and had to cut down on basic food items so she could afford
milk for the child. Another single worker commented in July 2001
that the poverty of his fellow workers with families was too sensitive
an issue to discuss with them directly, but he could see from
how they lived and how little they ate how difficult it was for
them.
This couple are in their early twenties. They live
in a small compound with other Nike workers. The man
has been working at a nearby factory producing Nike
sportshoes for three years. When the couple were interviewed
and photographed (in November 2001) the woman was
eight months pregnant.
They are scared. Already they are paying Rp. 80,000
(USD$8) per month rent, and another Rp. 12,000 (USD$1.20)
for water. In November 2001 his wage was Rp. 435,000
(USD$43.5) and when there was overtime available the
maximum extra income he was able to earn was Rp. 200,000
(USD$20). 'Now there is no overtime. My wage is O.K.
for food (basic low quality rice) for us, but we can't
buy a radio or anything. As a parent I am very worried
about my baby."
"We save money little by little", he continues,
"the one thing 1 am scared of is the financial situation
when the baby is born because the Nike wage is too
low."
In January 2002 local governments in Indonesia raised
minimum wages, but workers' say that cuts in government
subsidies for fuel and other essentials mean that
minimum wage increases are not keeping pace with inflation.
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