All sides protest Batam minimum wage

Fadli, The Jakarta Post, Batam

After making workers wait some time for his final decision, Riau Islands Governor Ismeth Abdullah officially raised the minimum wage to Rp 815,000 (US$81.50) per month from the previous Rp 635,000.

The 28 percent rise, on which a final decision was only reached at 8:30 p.m. on Wednesday, was greeted by protests from both businesspeople and workers on Thursday.

The chairman of the Batam branch of the Indonesian Employers Association, Abidin, told The Jakarta Post on Thursday that employers could not afford to pay the new minimum wage.

He lashed out at the administration for raising the wage without considering the problems faced by businesses following the government's decision to raise fuel prices in October.

"We let the governor decide Batam's minimum wage in the hope that he would consider the interests of employers, but it turns out we were wrong. We can't afford to accept this decision," said Abidin, adding that employers had hoped the new minimum wage would be below Rp 800,000 per month.

Following the governor's decision, Abidin, who owns electronics assembling firm Sat Nusa Persada, said he would lay off some of his 8,000 workers immediately, but did not give a number.

The new minimum wage in Batam -- a prominent industrial city that benefits from its proximity to Singapore, with many foreign and domestic firms having factories there that ship their products to Singapore before being dispatched worldwide -- is lower than to the new minimum wage of Rp 819,100 in Jakarta but higher than in Bandung, West Java, where it is Rp 710,000.

On the other hand, Batam workers say the new minimum wage is far from adequate for them to live decent lives given rising prices for basic necessities in Batam.

On average, workers say they need Rp 1,029,438 per month to live, while the new minimum wage only accounts for 79 percent of this figure.

The head of the All-Indonesian Workers Union in Batam city, Edwin Haryono, said on Thursday that the workers would protest the decision by going on strike.

"We want the new minimum wage to be match the cost of living, or at least be close to it. But with this decision, we'll go on strike as a last resort," he said.

Meanwhile, Azman Taufik, the director of the Riau Islands Manpower and Economic Affairs Office, Azman Taufik, said the new minimum wage only applied to employees who had been working with a firm for less than a year.

The wages of those with more than one year's service were calculated based on an agreement between the workers and employers, he added.

"We also plan to cut bureaucratic costs and illegal charges that currently burden businesses in Batam to allow them to cut their operating costs and pay their workers the new minimum wage," he said. "We hope that both the employers and workers will accept this decision."