Indonesian workers stage a rally along Jakarta's main road and block traffic on October 31, 2013 during a two-day nationwide strike

Unions are calling for hefty pay hikes as the cost of living skyrockets due to surging inflation, which has been driven up in recent months due to an unpopular fuel price hike.

Factories producing everything from clothes to electronics, often for international companies, stopped operations as workers across the archipelago of more than 17,000 islands downed tools.

Union leaders said that 1.5 million people took part in the strike on the main island of Java alone. Their figures are usually higher than those given by the police, which said early reports indicated 60,000 had taken part in the capital and surrounding districts.

In the manufacturing hub of Bekasi just outside Jakarta, large groups of workers sat in groups outside factories, brandishing banners that read: "Hike our wages by 50 percent".

"Life here in Bekasi is very expensive," said Muhammed Muhklas, 26, who works at a factory producing pharmaceuticals.

"We have to pay for housing, for food, and two million rupiah (a salary of around $175) a month doesn't cover our everyday needs," he said.

Security was tight with more than 1,500 police on duty in Bekasi and some 17,000 mobilised in Jakarta.

"All factories in Java's industrial hubs have stopped," said Said Iqbal, chairman of the Confederation of Indonesian Workers Union, adding that the strike would affect 20 of the nation's 34 provinces.

With inflation hitting 8.4 percent year-on-year in September, Iqbal said ordinary people were deeply concerned over the rising cost of living.

"Many workers who could not afford their rents have had to move out of their homes and live under bridges and in sewers. They are eating instant noodles instead of rice."

Workers say they have been hard hit by the government's decision in June to hike petrol prices by 44 percent and diesel by 22 percent, a move aimed at reducing subsidies that were gobbling up the state budget.

Workers are demanding "just a decent pay raise to compensate for inflation", said Iqbal, adding: "We labourers have contributed so much to the economy, why are we trampled upon?"

Strikes and protests by Indonesian workers have been on the rise as they demand higher wages at a time the economy is booming, clocking up average annual growth of above six percent in recent years.

Industrial action typical heats up in October and November as local governments decide on minimum wages for the following year in their areas.

Workers in Jakarta this year received a 44 percent increase in minimum salaries to 2.2 million rupiah ($200) a month, and others across the country have also receive sizeable raises.

Jakarta is due to decide on its new minimum wage between November 1 and 20, according to Iqbal, who said unions were calling for it to be hiked to 3.7 million rupiah.

However employers have expressed concerns that big salary hikes are denting profits and could lead foreign investors to take their business to neighbouring Asian countries.

The government has also raised concerns about soaring wages, particularly at a time when growth is slowing, and there has been recent economic turbulence due to fears that the US may reduce its stimulus programme.

Nevertheless, Indonesian factory workers remain some of the lowest-paid in Asia, often earning less than their counterparts in China or India.