Retailers reject 38% hike in minimum wage<\/p>\n
Emmy Fitri, The Jakarta Post, Jakarta<\/p>\n
Employers lodged a belated objection to next year's 38 percent
\nminimum wage increase for the Greater Jakarta area to Rp 591,600
\n(less than US$60) as stipulated in a gubernatorial decree, saying
\nthe hike was irrational given the current sluggish economy.<\/p>\n
Chairman of the Indonesian Retail Merchants' Association
\n(Aprindo) Hari Darmawan told a press conference on Thursday that
\nbusinesspeople were still attempting to recover from the various
\ncatastrophes that had followed the 1997 economic crisis. In
\naddition, they were now also feeling the pinch as a result of the
\nSept. 11 terrorist attacks in the United States, which had
\nheavily hit business in general.<\/p>\n
\"Last year, amid all our economic difficulties and low profit
\nmargins, we agreed to a Rp 426,250 minimum wage compared to the
\nprevious year's minimum wage of Rp 350,000. This proposed
\nincrease is devastating for us,\" Hari, who owns the Matahari
\nchain of department stores, said.<\/p>\n
Jakarta's Governor Sutiyoso issued a decree dated Nov. 2, 2001
\non the new minimum wage for 2002 after receiving the
\nrecommendations of the city's tripartite wage committee, which
\nconsisted of labor union and employers' representatives, as well
\nas officials from the Ministry of Manpower.<\/p>\n
Hari claimed that businessmen were facing profit drops of
\nbetween 20 percent and 30 percent due mainly to the fluctuating
\nrupiah and the current economic problems in the United States.<\/p>\n
\"I've checked with my fellow businessmen, they're all
\ncomplaining. Many exports to the U.S. have been suspended and
\ntheir products remain unsold. This is bad. Our position has not
\nyet stabilized,\" he said.<\/p>\n
He called on the Jakarta administration to review the 2002
\nminimum wage hike, and to at least authorize the payment of the
\nincrease in two stages, with wages being increased by 20 percent
\nduring the first six months, and the rest of the increase being
\npaid during the second half of the year.<\/p>\n
Aprindo has 400 member companies located in 12 provinces, with
\nits members employing more than 500,000 people.<\/p>\n
Meanwhile, the association's executive director, Kustarjono
\nProdjolalito, admitted that it was too late for businessmen to
\nreject the gubernatorial decree as it had already been issued.
\nStill, he hoped that the decree could still be reviewed.<\/p>\n
He said that the employers, as members of Apindo (the
\nIndonesian Businessmen's Association), had also been represented
\non the city's tripartite wage committee. The employers had only
\nagreed to the sharp wage hike due to the limited time allowed for
\nnegotiations with the other parties involved.<\/p>\n
\"It's because of technical mistakes that I can assure you will
\nnot happen in the future. The Apindo board of executives is also
\nstill discussing what to do because obviously we cannot afford
\nthe raise,\" Kustarjono quickly added.<\/p>\n
\"We could have just walked out of the negotiations, but it's
\ntoo late for that now,\" he said.<\/p>\n
He argued that in other regions, like Central Java and East
\nKalimantan, the employers had walked out of the negotiations and
\ntherefore the discussions on the minimum wage were deadlocked and
\nundecided to the present day.<\/p>\n
\"But, we don't really want that to happen in Jakarta, I think.
\nWe'll still work to find any leeway and to discuss this with our
\ncolleagues,\" Kustarjono said.<\/p>\n
Another executive, Hidayat, predicted that unemployment would
\nrise if the employers had to pay the wage increase.<\/p>\n
\"It's probable that they (employers) will be left with very
\nlow profit margins so that expansion will be impossible. Another
\nconsequence is that there will be no more hiring as employers
\ncannot afford such high wage levels. In the end, it's the
\ngovernment that will have to deal with the resulting
\nunemployment,\" he said.<\/p>",
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