The Multinational Monitor


B E H I N D   T H E   L I N E S

Indonesians On Strike

Amidst a year-long wave of labor unrest in a Country noted for its harsh labor repression, tens of thousands of striking Indonesian workers are currently demanding higher wages and better working conditions. Protests have, on occasion, been violent and have resulted in threats and the arrest of many labor leaders.

In April 1994, in Indonesia's fourth largest city of Medan, striking workers severely gutted several businesses and torched company cars. The military responded by arresting more than 100 workers and threatening labor leaders against future demonstrations. However, labor leaders say 10,000 workers from 20 factories remain on strike, demanding a rise in the minimum wage, an end to military intervention in labor disputes and employer adherence to overtime compensation and sick leave laws.

The Medan strikes follow the January 1994 "month of strikes," as it was dubbed by local press, in which more than 38,000 workers in the region around the capital city of Jakarta conducted nearly 50 strike actions, paralyzing many companies. In February, at least 82 people were arrested after a demonstration turned violent, resulting in the sacking of hundreds of ethnic Chinese-owned shops and the killing of at least one ethnic Chinese business person.

The New York-based Human Rights Watch has expressed concern that some of those arrested may have been detained for their role in organizing the rally, rather than the violence which followed. The group is also worried that those arrested may face serious physical abuse while in detention, as there is a well-established pattern of torture during interrogation by military and police in Medan.

The U.S. Trade Representative (USTR) warned Indonesia in June 1993 that tariff benefits under the Generalized System of Preferences program would be withdrawn in February 1994 unless progress was made in the protection of internationally recognized labor rights, including freedom of association. After a series of legal reforms in January 1994 that addressed some of the USTR's concerns, the USTR decided to "suspend but not terminate" its review of Indonesian labor rights practices. The USTR will conduct an assessment in August of the implementation of the January reforms.

Despite the reforms, military intervention in labor disputes remains routine, only the government-controlled union has been officially recognized and union organizers are still subjected to threats and violence.

Working for Less

A growing number of U.S. workers are earning poverty wages, according to the U.S. Census Bureau and the U.S. Bureau of Labor.

A March 1994 U.S. Census Bureau report entitled "The Earnings Ladder" found that roughly 18 percent of the 81 million year-round, full-time workers in the United States earned less than $13,091 per year in 1992 - a 50 percent increase over the 12 percent who had low earnings in 1979. The Bureau's low earnings threshold is based on a modified version of the poverty level for a family with two children.

The brief found that the group most impacted by the shift toward low earnings is voting workers, aged 18 to 34, for whom the proportion of low-wage earners roughly doubled. Women were also found to be more likely than men to have low earnings.

Adding weight to the brief's findings, the Bureau of Labor announced in April 1994 that the 1993 Employment Cost Index, which measures the increase in wages and benefits that employers pay workers, grew at its lowest rate in a decade.

According to Jared Bernstein, a labor economist with the Washington, D.C.-based Economic Policy Institute, the major cause of the rise in low-wage earners is "the diminished bargaining power of the U.S. worker," due to a combination of de-unionization, liberalization of trade policy, globalization and the fall in the minimum wage, which in 1993 was 25 percent lower in real terms than in 1979. "The thrust of economic policy of the [U.S. government] has been much more mindful of bond markets than labor markets," Bernstein says. "[The Census Bureau] report challenges that notion of ameliorating Wall Street and ignoring Main Street."

Coke Workers Oppressed

A siege mentality has gripped the ABASA Coca-Cola bottling plant in Puerto Barrios, Guatemala, as union organizers have been subjected to death threats and intimidation. Police accused the organizers of exploding bombs outside a general manager's house and inside the plant perimeter on February 15, 1994 and have issued warrants for their arrest.

After repeated attempts to organize a union at the Puerto Barrios plant, one was formed in December 1992. Within weeks, 20 workers were illegally fired, including the newly-formed union's entire executive. ABASA then claimed that, since the executive was not working at the plant, the union could not be recognized.

In an April 6 letter to Coca-Cola Chief Executive Officer Roberto Goizueta, the Geneva-based International Union of Foodworkers denied allegations that the workers were responsible for the bombing and urged the company to intervene immediately in the conflict and "correct the ongoing injustice against the union members at Puerto Barrios."

Atlanta-based Coca-Cola denies that it wields any influence over labor practices at its Guatemala bottling plant. "We're aware of what's happened, but it's not our responsibility," says Coca-Cola Manager of Media Relations Bill Hensel. "Labor negotiations are the responsibility of the local bottler."

But according to Erich Hahn, of the Chicago-based U.S./ Guatemala Labor Education Project. "Coca-Cola knows that workers' lives are at stake and that an expression of urgent concern by management would go a long way towards resolving the situation. One hopes this is not an indication of corporate responsibility in the 'NAFTA world order."'

- Aaron Freeman

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