Better business climate key to minimum wage hike<\/p>\n
JAKARTA (JP): Businessmen say most employers will be able to
\nincrease their workers' salaries above the minimum wage level if
\nthe business climate improves and the high-cost economy is
\ncontained.<\/p>\n
Antonius Tardia, chairman of the Indonesian Footwear Associ
\nation (Apresindo), said most manufacturing industries were now
\nfacing difficulties in obtaining banking services, especially
\nletters of credits (L\/C). This, he added, had caused the
\nfactories to cut their production capacities.<\/p>\n
"In the footwear and textile sector, which is labor-intensive,
\nidle capacity has reached between 30 percent and 40 percent. This
\nsharp cut has contributed to the restriction of labor costs," he
\ntold The Jakarta Post here on Thursday.<\/p>\n
Minister of Manpower Bomer Pasaribu said on Friday it would be
\ndifficult for the government to meet the workers' demands for an
\nincrease by above 50 percent because of the economic crisis that
\nhas affected most companies. He said the hike, slated to be
\nannounced in February, might be between 20 percent and 45
\npercent.<\/p>\n
Yacob Nuwu Wea, acting chairman of the Federation of All
\nIndonesian Workers Union (FSPSI), said the labor union would call
\nfor a national strike if the government could not increase the
\nminimum wages by at least 50 percent. He said the current minimum
\nwage level, which ranges between Rp 150,000 and Rp 290,000 per
\nmonth, was too low.<\/p>\n
Antonius said rampant illegal levies, poor law enforcement and
\nstrict labor regulations had also contributed to low wages.<\/p>\n
"Despite the reform movement, there is no indication that
\ncivil servants and law enforcers have changed their mentality to
\nrestore their image," he said.<\/p>\n
He said civil servants and law enforcers, including security
\nauthorities, should improve their services to the public in
\ncompensation for the tax and other legal levies they had paid to
\nthe government.<\/p>\n
He said it had become an open secret that businessmen did not
\nenjoy better services from government employees without paying
\nmoney, and government employees were reluctant to serve
\nbusinessmen unless they were paid.<\/p>\n
Illegal levies were rampant in government offices dealing with
\nlicenses, deliveries, security and labor affairs and in delivery
\nprocess, especially at seaports, he said.<\/p>\n
"Most businessmen have no other alternative than spending
\nextra money to avoid bureaucratic hurdles. Besides, most
\nemployers have to pay more money to security authorities for
\nsecurity at their plants. All these extra expenditures have been
\nclassified as invisible costs," he said.<\/p>\n
He said most employers had slashed a part of their labor costs
\nto cover these invisible costs, making them unable to pay their
\nworkers above the minimum wage level.<\/p>\n
Antonius said most companies had frequently complained about
\nprevalent illegal levies, but had yet to receive a positive
\nresponse from the government.<\/p>\n
"The government should take stern measures to enforce the law
\nand improve its public service to create a better business
\nclimate and labor conditions in Indonesia," he said.<\/p>\n
Hendrik Sasmita, president of footwear company PT Panarub,
\nconcurred and said the high-cost economy had become a classic
\nissue that had yet to draw the proper attention of the present
\ngovernment.<\/p>\n
He said that despite the reform era, it would be difficult for
\nemployers to pay their workers above the minimum wage level due
\nto the high-cost economy.<\/p>\n
"If we raise our labor costs, our products will not be
\ncompetitive in the international market," he said, citing that in
\nthe footwear and textile sectors, Indonesia faces Asian
\ncompetitors such as Vietnam, South Korea, Malaysia and China.<\/p>\n
He said many hoodlums had used workers employed in his company
\nto "rob" his money.<\/p>\n
Anthon Sihombing, deputy chairman of the Association of
\nIndonesian Labor Exporters (Apjati), said the government would be
\nable to increase the current minimum wage by at least 30 percent
\nif invisible costs could be minimized.<\/p>\n
"The invisible cost could be reduced to zero if the government
\nis capable of reforming the bureaucracy and taking stern measures
\nagainst corruption and collusion," he said.<\/p>\n
Malaysia, he said, could pay its workers more than Indonesia
\nbecause it had managed to curb the high-cost economy.<\/p>\n
Anthon also said foreign investors would refuse to invest in
\nIndonesia if the government could not ensure legal certainties.
\n(rms)<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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