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Economy, Labor

independent forum, hour workweek, labor code, union activities, national union

In 2000 Indonesia had a total labor force of 102 million people, up from 60 million in 1980. More than 2 million new jobs are required each year to employ all of the new entrants to the labor market. Agriculture employs 45 percent of Indonesia’s workers, services 39 percent, and industry 16 percent. An estimated 40.8 percent of the labor force was female in 2000, up from 36 percent in 1980.

Trade unions have been active in Indonesia since 1908. Under Suharto, the government recognized only one national union, the All-Indonesia Union of Workers (Serikat Pekerja Seluruh Indonesia), founded in 1973. The union is a federation of 13 national industrial unions with a 1992 membership of 2.8 million, or about 3 percent of the workforce. Wages in Indonesia are regulated through arbitration, and the 40-hour workweek is standard throughout the country. The labor code of 1948 and later laws set standards regarding child labor, women in industry, work conditions, and vacations. There are enormous problems with enforcing the labor laws, however, especially in new manufacturing firms. As the economy has grown rapidly, workers have become increasingly dissatisfied with labor conditions and the effectiveness of official unions. The Suharto government kept a tight grip on union activities. In 1992 the Indonesian Prosperous Labor Union (Serikat Buruh Sejahtera Indonesia) was formed to provide an independent forum for labor problems, although Suharto’s regime denied the union official recognition and imprisoned its leader, Muchtar Pakpahan. After Suharto’s resignation, interim president Bucharuddin Jusuf Habibie ratified a convention enshrining the right of workers to join labor associations of their choice and bargain freely. Pakpahan was subsequently released from prison and the ban on his labor union lifted. The Indonesian Prosperous Labor Union has about 250,000 members.

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