The 7 percent deal<\/p>\n
Jakarta Governor Sutiyoso has officially approved the 7
\npercent increase in the provincial minimum wage which will take
\neffect next year.<\/p>\n
Probably no one can say exactly whether the decision is good
\nor bad news for both employers and workers. The increase is in
\nfact 18 percent lower than what the labor unions had demanded.
\nThe figure is also lower than the inflation rate which is
\nestimated to reach almost 10 percent this year.<\/p>\n
With the increase, a worker will receive a monthly wage of Rp
\n631,000 beginning January 2003. Employers who cannot afford to
\npay higher wages can submit their objections to the governor.
\nThey may be shown some leniency and be allowed to delay the
\nimplementation of the new ruling.<\/p>\n
Indeed, it is hard to imagine how one can survive for a month
\non such a small amount of money in this capital city. The
\nincrease is not in keeping with the rise in prices of basic
\ncommodities, but this is a fact of life that the workers have to
\naccept.<\/p>\n
It is definitely risky in such a situation for employers or
\ncompanies to give more than a 7 percent increase, but to give no
\nincrease at all could be considered as a sign of disregard and
\ncould trigger violence. Under such circumstances, to give a 7
\npercent increase is the best thing they could do.<\/p>\n
This decision was made after a prolonged debate. The
\nIndonesian Employers Association (Apindo) had previously rejected
\nany wage increase for 2003, arguing that business had been
\nsluggish in the capital city. They also blamed the big floods
\nthat devastated many parts of the city between January and
\nFebruary this year as an important factor which had affected
\ntheir businesses. They claimed to have suffered a total loss of
\nRp 5 trillion due to the floods. They also fear the repercussions
\nof the Bali bomb attacks will affect their businesses in the near
\nfuture. Last but not least, the high-cost economy is still an
\nunresolved problem that burdens businessmen in Indonesia.<\/p>\n
We all agree that business has been slack for years as there
\nhave been few new investments and capital flight continues.
\nHowever, no one can deny that hardship has sharply increased for
\nworkers.<\/p>\n
It is of course understandable that workers demand a higher
\nwage increase. Nevertheless it would also be wise to consider the
\nchaotic state of the national economy. Therefore, all parties
\nconcerned in the debate in truth have no other option but to
\naccept the 7 percent increase and to start thinking in a more
\nrealistic way.<\/p>\n
There are things the workers should take into consideration if
\nthey reject the decision -- for example protests and outbreaks of
\nviolence that may end up in dismissal.<\/p>\n
Last year, records showed that this capital city of more than
\neight million people had a labor force of more than four million.
\nFifteen percent of the total potential labor force, or more than
\n600,000 people, were jobless. This is an alarming figure.<\/p>\n
Had the workers' unions been persistent in their demand for a
\n25 percent increase in the minimum wage, and had the workers
\nrejected the 7 percent hike, things could have been worse. The
\nnumber of unemployed might rise and this could lead to an
\nincreased number of poor people in the city. The latest data
\nindicates that some 860,000 people in the city are classified as
\npoor. Social unrest, therefore, is on the doorstep as hungry
\npeople are angry people.<\/p>\n
Another classic question that has yet to be answered is the
\nrelationship between wage hikes and productivity. There has been
\nno definite answer to the question of whether a wage increase
\nwould boost productivity, or whether productivity must come
\nfirst.<\/p>\n
This enigma is not unlike the question of which comes first,
\nthe chicken or the egg?<\/p>\n
We all acknowledge that the national economy is now in a sorry
\nstate. Therefore it is better for both, employers and employees,
\nto join hands and realize that they cannot be separated as, in
\nfact, they share a mutual interest.<\/p>\n
The employers for their part must be honest and fair and not
\npretend to be unable to pay their workers more and submit a
\nletter of objection to the governor. They should also realize
\nthat on the one hand workers have a right to live decently as
\ncitizens while on the other they must also be aware of their
\nobligation to give their best.<\/p>\n
This mutual respect between worker and employer must be
\nmaintained and promoted, especially in these difficult times to
\nprevent labor-related problems from developing and growing into
\nexhausting conflicts.<\/p>",
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