Sunday, September 19, 2010

New Labor Movement Spreading In South Asia

Workers shout slogans during a strike at the Chinese-owned Pine Great Cambodia Garment Co. Ltd. in Phnom Penh on Wednesday. In Indonesia, where three powerful trade unions represent the vast majority of the country’s 3.4 million unionized workers, there is also mounting pressure to increase the minimum wage. (Reuters Photo/Chor Sokunthea)

From Indonesia to Bangladesh, from Cambodia to India, as factories relocate from China because of rising wages workers are becoming increasingly militant in demanding a larger share of the region’s economic success.

The latest uprising came in Cambodia last week, when tens of thousands of workers went on strike to reject a proposed 20 percent pay increase — crippling Cambodia’s export-orientated garment industry, which produces items for renowned brands including Gap, Benetton, Adidas and Puma.

The strike followed a deal between the government and industry that set the minimum wage for garment and footwear staff at $61 a month. Unions want a base salary of $93.

In Indonesia, where three powerful trade unions represent the vast majority of the country’s 3.4 million unionized workers, there is also mounting pressure to raise the minimum wage. Garment factories in particular, including some that are foreign-owned, have been hit by strikes and disputes over long hours and low wages.

The minimum wage is not set in Jakarta and varies from district to district. In 2008 the highest minimum wage was $123 a month in Papua, and the lowest $60 in East Java, according to the Manpower Ministry.

Tens of thousands of workers protested for minimum wage levels to be raised during May Day demonstrations in Jakarta this year, until riot police stepped in.

In Indonesia at least one major strike or labor protest took place in Indonesia every week, mostly over the minimum wage. Industries are relocating from China, the country is experiencing strong economic growth, with a rising GDP.

The Cambodian action came just weeks after Bangladesh’s three million garment workers, who make Western clothes for the world’s lowest industrial wages, spurned an 80 percent pay hike, attacking factories and burning cars. Tens of thousands of workers went on a rampage over the 3,000 taka ($43) monthly minimum wage offer, then staged wildcat strikes protesting a four-month delay in implementation.

Earlier this month, Bangladesh said exports leapt more than 25 percent year-on-year in July, with manufacturers linking the jump to a shift in orders from China to the lower-cost country.

Costs are going up in places like China, so you are getting a move to Vietnam, Cambodia, Bangladesh and this is good for these countries. And even if manufacturers are now facing wage pressures in the new manufacturing centers, they are on a different scale.

China is getting more expensive. To be sure, less developed countries are, too, but the gap between per capita incomes in places like Bangladesh, Cambodia and Vietnam and those in China will continue to widen going forward. Wages of workers in these countries are unlikely to go up in absolute terms step for step with China’s wages.

In Vietnam, where independent trade unions are banned and inflation is running at some 8.75 percent, there have been 139 strikes in the first five months of 2010, according to the Vietnam Confederation of Labor. The bulk of the protests concern low pay and poor conditions, with many of them hitting foreign-owned factories. Tens of thousands of workers at a Taiwanese-owned shoe factory in southern Vietnam went on strike in April.

India, which has a highly vocal workers’ movement, has also seen recent disputes over pay and conditions at companies such as mobile handset manufacturer Nokia, car maker Hyundai and the technology and services group Bosch. Jakarta Globe

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