Salim's garment executive says minimum wages too high<\/p>\n
By Maria Andi<\/p>\n
JAKARTA (JP): An executive of the garment and textile division
\nof the Salim Group says the new minimum wages set by the
\ngovernment are too high for the garment and footwear industries
\nand some companies may be forced to cut back on their workforce,
\nor even close down.<\/p>\n
Jim T. Halim, coordinating director of the diverse textile
\ndivision of the giant business group, said the problem
\nparticularly arises when it comes to paying workers overtime.<\/p>\n
The two industries, he said, receive differing information on
\novertime.<\/p>\n
Under the law, weekday overtime rates should be between 1.5
\nand 1.7 times higher than the normal wage, while weekend rates
\ncould be twice as much.<\/p>\n
The government announced increases this month averaging 10
\npercent in the minimum wage levels across 25 of Indonesia's 27
\nprovinces. The increases become effective on April 1. The minimum
\nwage level in Jakarta will be increased to Rp 5,300 ($2.4) a day
\nfrom Rp 4,600.<\/p>\n
\"Garment and shoe companies will find it hard to start the Rp
\n5,300 minimum wage unless the government makes exception to the
\novertime payment,\" Halim said.<\/p>\n
Many garment and footwear companies barely survive with the
\ncurrent minimum wage levels, he said. With the new increase, some
\nwill be forced to retrench people, or worst still, close down
\naltogether.<\/p>\n
\"With the high industrial costs, it is hard for the companies
\nto be competitive in the international market,\" he said.<\/p>\n
Minister of Manpower Abdul Latief, himself a successful
\nbusinessman before joining the cabinet in 1993, on Monday said
\nthat there was no going back on the minimum wage question.<\/p>\n
Latief, however, agreed that to make companies more
\ncompetitive abroad there was a need to abolish some of the
\nofficial charges currently levied on them. For his part, he said
\nhe will waive the fee for workers' insurance against accidents.<\/p>\n
Halim argued that exception should be made for the garment and
\nfootwear industries, at least with regard to overtime.<\/p>\n
Garment and footwear are sensitive businesses because of
\nconstant changes in fashion. \"Market orders should be fulfilled
\non time, otherwise the products would no longer be in fashion and
\nbuyers cancel their orders,\" Halim said.<\/p>\n
\"The (overtime) policy has also scared away many foreign
\ninvestors from entering the garment and shoe industries,\" he
\nsaid, adding that Singapore, Thailand and South Korea do not have
\nas restrictive policies on overtime payments as in Indonesia.<\/p>\n
Halim said to overcome the problem, many companies have simply
\ncommissioned the jobs on a \"wholesale\" basis with workers, paying
\nthem on the basis of their productivity.<\/p>\n
Rustam Aksam, the head of the Textile, Garment and Leather
\nUnion of the All-Indonesian Workers Union Federation, told The
\nJakarta Post that the overtime policy should be applied across
\nthe board, irrespective of the market condition.<\/p>\n
\"Workers should be paid more for doing overtime, which is not
\nobligatory to them,\" Aksam said.<\/p>\n
He dismissed Halim's argument that companies have difficulties
\nbecause they are unable to afford overtime payments.<\/p>\n
\"Unstable garment and shoe factories were not competitive nor
\nefficient in the first place. It has nothing to do with labor
\ncosts,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/salims-garment-executive-says-minimum-wages-too-high-1447893297",
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