Slamet Susanto, Bantul – Cigarette producer partners (MPS) are earning less than the Rp 1.5 million (US$150) a month they received four years ago producing hand-rolled cigarettes for a renowned brand in Bantul regency, Yogyakarta.
"We earn less due to repeated increases in the cigarette excise applied by the government," said Dwi Nusantari, one of the workers.
An MPS owner in Bantul, Suluh Suadiarto, said the decrease in the workers' take-home pay was mostly due to a decrease in working hours. He said until about four years ago workers' hours could amount to 60 hours per week while currently they only work 40 to 44 hours.
"We have to reduce working hours because we produce less. We produce less because we receive less orders due to the hike in the price as a result of an increase in the cigarette excise," Suluh said.
Chairman of the MPS association, Djoko Wahyudi, said there were currently some 60,000 workers employed by 38 MPS across Indonesia.
He expressed concern that a government plan to further increase the cigarette excise by 5 percent next year would badly influence the workers. "If hand-rolled cigarette become more expensive, mass layoffs may be a matter of time," Djoko said.
This increase, he said, would raise the price of hand-rolled cigarette products and they would not be able to compete with manufactured ones. If this is the case, there is possibility that producers would replace human labor with machines.
A machine, he said, can substitute up to 1,500 workers. "You can imagine how many workers would lose their jobs if the 5 percent increase is applied," said Djoko, an owner of an MPS in Lamongan, East Java.
Djoko suggested that the government apply different excises to hand-rolled products and machine-made ones. That way, handmade cigarettes could compete with manufactured ones meaning workers in the sector could keep their jobs.
"If the excise of machine-made products is increased by 5 percent then hand-rolled ones can increase by 2 percent only. The government will still generate income but the legacy of hand-rolling can also be maintained," he said.
He added that the federation of the cigarette workers' association overseeing Java Island had sent a letter to President Susilo Bambang Yudhoyono regarding the negative impact of excise hike on workers. They asked for the government's serious attention in dealing with the situation.
Tri Asih, another worker, expressed fear that limited life skills and educational background would render them unemployed if they were dismissed.
"It's not impossible that pretty female workers may force themselves to become commercial sex workers to help support their families," Tri Asih said.