Future Looks Bleak for Laid-Off Indonesian Workers

WEST JAVA, Indonesia — Ida Farida, 33, never imagined she would lose the job that she had held for 10 years.

In November 2008, she felt as if a bomb dropped when her company, Omedata Electronics, in Bandung, West Java, announced that it was closing down its computer parts factory, where she had worked as a machine operator. Having been hit by the global financial crisis, the firm had to let go of 1,301 employees, including Farida.

Indonesian workers march during the commemoration of International Labor Day on the main street of the business district in Jakarta, Indonesia, on May 1. (Photo: AP)

WEST JAVA, Indonesia — Ida Farida, 33, never imagined she would lose the job that she had held for 10 years.

In November 2008, she felt as if a bomb dropped when her company, Omedata Electronics, in Bandung, West Java, announced that it was closing down its computer parts factory, where she had worked as a machine operator. Having been hit by the global financial crisis, the firm had to let go of 1,301 employees, including Farida.

"It was really shocking, especially because my husband had no stable job," she said.

Although Farida’s salary was just slightly above the monthly minimum wage of 939,000 rupiah (US$ 100), it was quite enough to take care of her family’s needs, since they did not have to pay rent for their house—a tiny tenement owned by her in-laws and located in a crowded alley in southern Bandung, close to the factory.

Farida’s job had provided a safety net for her family—her three-year-old daughter and husband Rudi—who has been out of a permanent job since 1998, when the textile factory he was working for closed down as a result of the 1997 financial crisis that affected the Asian region. Unable to land another permanent employment, Rudi has been taking on odd jobs that pay little and are for the most part unstable. On worse days, he comes home with nothing in his pockets.

A year since the layoff, Farida has yet to find another job. Her severance pay of 26 million rupiah (US$ 2,773) is steadily running out. The computer rental shop in which she invested a portion of her severance pay has turned out to be losing venture.

"People rarely come to play video games anymore," she said, sighing. "People around here are also affected by the layoff, as most of them are factory workers."

Many of her former colleagues are also finding it extremely difficult to get another job. "Maybe because most of us are over 30 years old and only high school graduates," Farida explained.

The global financial recession that struck last year following the collapse of the US’s financial giant Lehman Brothers triggered a chain of reaction that included depressed demand for Asian goods and services from the developed world.

But unlike other countries, Indonesia was relatively unscathed by the crisis, since its economy relies mostly on the domestic market instead of exports. Still, the crisis has trimmed demand and slumped prices of Indonesia’s export products, including textiles, coal, palm oil, rubber and fabricated goods, which push companies to make adjustments by reducing the size of their workforce.

According to the Indonesian Employers Association at least 222,500 workers were dismissed as of March 2009. Those in the garment, plantations and forestry industries have been the hardest hit, since Indonesia is the world's biggest palm oil producer and the world's second biggest rubber maker.

The Indonesian Labor Union Confederation has warned that some 300,000 migrant workers would return to Indonesia after their contracts run out this year, as host countries are still feeling the pinch of the crisis.

To help industries particularly hit by the economic slowdown and prevent them from resorting to massive layoffs, the government has set aside a 73.3-trillion rupiah (7.8 billion U.S. dollars) stimulus package. This is on top of other mitigating measures such as the conduct of vocational and entrepreneurial skills training as well as efforts to provide green jobs, which refer to those types of work that contribute substantially to protecting or restoring the environment, including those in agriculture.

The Labor Union Confederation said that the stimulus program could more effectively help cushion the impact of the financial crisis if applied in the rural areas to create the needed infrastructure and boost their economies.