East Java raises regional minimum wages by up to 15%<\/p>\n
Ainur R. Sophiaan, The Jakarta Post, Surabaya<\/p>\n
Following tough negotiations with labor unions and employers,
\nEast Java Governor Imam Utomo eventually approved a minimum wage
\nincrease of between 13 percent and 15 percent in regencies and
\nmayoralties in the province starting Jan. 1, 2003.<\/p>\n
"I signed the decree on the minimum wage increase on Tuesday
\nafter wage boards representing employers and workers in the
\nregencies and mayoralties gave their agreement to the proposed
\nincrease," he said in Surabaya on Thursday.<\/p>\n
Employers had proposed an increase of five percent to eight
\npercent while labor unions wanted an increase of between 15
\npercent and 30 percent.<\/p>\n
Imam said employers had till 10 days before the gubernatorial
\ndecree took effect to lodge objections against paying the
\nincrease.<\/p>\n
"All objections will be assessed and (audited) companies found
\neconomically unable to implement the regulations on the new wages
\nwill be exempted from it and allowed to comply with the current
\nregulation. This mechanism is made available to avoid any ...
\ndismissals (and strikes)," he said.<\/p>\n
Workers could appeal against any exemptions, he said.<\/p>\n
Minimum wages in the province will be raised to around Rp
\n550,000 per month from the current Rp 450,000 per month (see
\ntable).<\/p>\n
Many employers expressed disappointment with the new
\nstandards, saying many companies would not be able to cope with
\nthe increase, combined with electricity, telephone and fuel
\nhikes.<\/p>\n
"It is a serious problem. But we are talking with other
\nmembers of the Indonesian Employers Association (Apindo) to seek
\nthe best solution," Maspion Group human resources manager Romy C.
\nH. said.<\/p>\n
Maspion has already been forced to shut part of a furniture
\nfactory due to decreasing demand and efficiency.<\/p>\n
"We are evaluating all units in our groups to analyze our
\nmarket and costs in the coming year to see whether we will be
\nable to pay our employees in accordance with the gubernatorial
\ndecree in 2003," he said.<\/p>\n
The president of footwear company PT Mekar Lastindo, Alianto
\nWibowo, said he would lodge an exemption application over the new
\nminimum wage because he could not afford the increase.<\/p>\n
He said the hike would certainly affect labor intensive
\nindustries such as footwear and garment factories.<\/p>\n
Of 120 shoe factories in the province, only 38 have survived
\nthe prolonged economic crisis while many others have relocated to
\nChina, Vietnam and Cambodia.<\/p>",
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