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Jobs in footwear industry drop by almost 60% JAKARTA - Over 180,000 people in the footwear industry lost their jobs last year, and many of them may have returned to traditional agriculture, according to the latest government data. The 2003 National Labor Force Survey report (Sakernas) published by the Central Statistic Agency (BPS) recently, stated that the number of jobs in the footwear industry plunged by 58.70 percent from 310,000 in 2002 to 128,000 last year.
"Many footwear factories have closed down (partly) due to weak investment climate," Aden Gultom, head of the BPS workforce sub-directorate explained to The Jakarta Post over the weekend. Aden said that the footwear industry was one of the top three industries contributing to the decline in the number of jobs in the manufacturing sector last year, falling by 9.76 percent to 10.93 million from 12.11 million in 2002. The number of jobs in the furniture industry and non-mining industry also fell.
Unfavorable labor regulations, which have forced companies to rapidly increase the minimum wage at a time when both exports and domestic sales are weak has caused some firms to leave the country or reduce their staff, experts said. "The minimum wage increase has been too fast," said Bambang Widianto, labor analyst at the National Development Planning Agency (Bappenas).
The minimum wage in Jakarta, which was Rp 231,000 in 1999 jumped by more than 150 percent to Rp 591,266 by 2002. Last year it rose to Rp 631,000, and the Jakarta administration increased it again by 6.3 percent to Rp 671,550 for this year. Bambang said that the government should move quickly because labor-intensive factories such as in the footwear industry, were one of the best ways to resolve the pressing unemployment problem here as around half of the country's more than 100 million workforce have just an elementary school education.
He suggested that the government ease existing labor regulations, particularly those that make investment into labor-intensive projects costlier. Aden added that many of the workers who lost their jobs in the manufacturing sector moved to the agriculture, forestry and fishery sectors, which last year absorbed about 1.5 million new workers. Chatib Basri, an economist from the University of Indonesia, said the data further confirmed that a "deindustrialization" of the economy was taking place, wherein people from the formal manufacturing sector were moving back to pre-industrial jobs like farming and fishing.
Chatib offered a solution that instead of continuing to increase the minimum wage, the government should work together with companies to provide affordable accommodation near factories. Major concerns in a worker's life are often the costs of housing and transportation, he said.



Posted in Economy @ 21 June 2004 00:01 CET by Jeroen · 'Blog' RSS feed · permalink






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