Wednesday, November 15, 2006

Minimum wage upped 10 percent in Jakarta

National News - November 07, 2006
Ridwan Max Sijabat, The Jakarta Post, Soroako, South Sulawesi

Raising the legal minimum wage by around 10 and 15 percent in Jakarta and West Java will not be enough to improve conditions for low-income workers next year, unions say.

A new, unmarried full-time worker in Jakarta will now be legally entitled to receive at least Rp 900,000 (US$98.7) a month, a 9.95 percent increase in the minimum wage from the current Rp 819,100. Meanwhile employees in the formal sector in West Java must now be paid a minimum wage of Rp 504,000, a 15 percent rise from the current Rp 447,000.

The wage levels only apply to people in the formal sector and exclude those in the non-taxed, informal sector that make up the majority of country's workers.

Minimum wage levels in other provinces are currently being negotiated by local governments, employers and workers representatives. Each province must publicly announce their decisions by early December, a month before they are enforced.

Manpower and Transmigration Ministry director general for industrial relations Muzni Tambusai said workers in other regions with higher living costs, like Batam, were unlikely to get a monthly wage hike higher than the 10-15 percent range.

"The government understands that the present wage levels are insufficient for workers to lift their standard of living but we cannot force employers to meet workers' demands for higher increases because of the continued economic crisis and the unfavorable investment climate," Muzni said.

He said the failure of businesses like garment factory PT Great River Indonesia and state bus company PPD meant the companies were unable to pay thousands of workers' salaries for several months and could not pay them Idul Fitri holiday bonuses.

Labor unions say the planned hikes are insignificant and less than this year's inflation, which is likely to average at 12 percent. They have warned regional governments that industrial action or unrest is likely if wages are not increased.

Syamsul DP, the deputy chairman of the Federation of Chemical, and Mining Trade Unions, which is under the umbrella of the Confederation of All-Indonesian Workers Unions, said his organization would fight for the imposition of a sectoral minimum wage system.

This would encourage more affluent companies to pay higher wages than the regional minimum, Syamsul said.

"The mining, manufacturing, chemical and forestry sectors can (afford to) raise their minimum wage more than the regional minimum," he said.

Secretary general for the Confederation of Indonesian Prosperous Labor Unions Didin S. said delegates had walked out of the last three-party meetings held to determine the minimum wage in Jakarta because the proposed increases were unrealistic.

"This minor hike is part of an unfair remuneration system and we are afraid it will incite labor unrest because workers will remain unable to meet their basic needs," Didin said.

The government has predicted this year's inflation rate would track down to around 6 percent.

Didin said the monthly minimum wage in Jakarta should be set at Rp 1.6 million.

Continuing lower rates of pay would make it impossible for workers to improve their productivity, meet their daily basic needs and take part in training programs, he said.



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