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Workers Strike in Indonesia - Essay Example

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The recent workers strike in Indonesia was seen to result in massive losses for the employers in the country. The economic impact of the strike was considerably massive in in light of the fact that the country has a fast growing economy that is heavily reliant on robust exports. …
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Download file to see previous pages This paper seeks to establish what was the cause of the strike, what were the reactions of the key stake holders as well as establish the effects of the strike. It also looks at the possible legal implications of the strike as well as highlighting the solutions that were reached by the stakeholders in resolving the crisis. Workers Strike in Indonesia Introduction Workers Strike in Indonesia According to police estimates that were given by the police spokesman Col. Rianto, More than 2 million workers working in more than 80 industrial estates and about 700 companies recently went on strike in Indonesia. The striking workers were mainly demanding for increased wages on their part as well as opposing the hiring of contract workers in the country (Jakarta Globe, 2012). The practice of hiring contract workers in the country allows for employees to hire workers on temporary one year contracts without having to provide them with any benefits. This practice that is commonly referred to as “outsourcing” has been vehemently opposed by the union and was cited by the Confederation of Indonesian Workers’ Union Mr. Raweyai as being the main disgruntling factor behind of the worker’s strike (Jakarta Globe, 2012). ...
of the biggest companies in Indonesia have threatened to shut down their production units in the country a result of the worker’s strike in the country.Many of these foreign investors could simply not accept the situation that had seen some of the labor unionists intimidating workers who worked at the factories that had banned their workers from participating or supporting the strike in any way (Jakarta Globe, 2012). According to the deputy Chairman of the Indonesian Chamber of Commerce, Mr. Simanjorang, as a result of the unfavorable employment policies in Indonesia, the country is currently less competitive in comparison to some of the other countries in Asian such as Cambodia and Vietnam. Both Vietnam and Cambodia have been seen to be providing lower wages for their workers as compared to Indonesia by about 10%. They have also been seen to provide better industrial facilities for international organizations setting up production units in the countries (Jakarta Globe, 2012). Relocation by these companies into other countries will have an adverse impact on unemployment levels and will create a largely negative investment climate in Indonesia. The move by these companies has been attributed to be mainly driven by legal uncertainties as regards labor issues in the country. The companies were compelled to immediately shut down their production and business operations during the strike which severely affected their import and export operations and was seen to lead to fairly large losses on their part. The strike caused estimated production losses amounting to close to close to about 1 trillion Indonesian Rupiah which is about $104 million (Jakarta Globe, 2012). Why Indonesian Employers Prefer using Outsourcing Services Most of the companies employing employees in ...Download file to see next pagesRead More
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