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Indonesia / Pressure on Nike suppliers for paying minimum wages

The battle over factory pay in Indonesia is intensifying, with vocal local trade unions joining hands with a US non-governmental organisation to pressure Nike suppliers into paying minimum wages.

A yawning gap is opening up between employers, who argue that hefty minimum wage increases are destroying their profitability, and trade unions, who argue that wages must rise further and employment conditions be improved.

The Jakarta city government hiked the minimum wage by 44 per cent to Rp2.2m ($228) on January 1 and other provinces have followed suit with hefty increases.

At a joint press conference in Jakarta on Monday, Indonesian trade unionists and Education for Justice, an American Catholic NGO, criticised Nike’s suppliers in Indonesia for seeking exemptions to the minimum wage, which are allowed for companies that cannot afford to raise pay.

Jim Keady, who has run a long campaign for Education for Justice to pressure Nike to lift wages, said that only one of the seven or eight Nike suppliers he investigated in Indonesia had agreed to pay the new minimum wage.

Although the minimum wage exemptions are legal, Keady and the trade unionists said that it was wrong for Nike suppliers to apply for them because even minimum wages were insufficient to cover the costs of a decent life.

Indonesia is Nike’s third biggest source-country for shoes, after Vietnam and China, with 40 factories and 171,000 workers, 79 per cent of them women.

Chosen excerpts by Job Market Monitor from

financial times

via Indonesia: Nike in low wages row | beyondbrics.

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