Apindo proposes biennial wage hike

The Jakarta Post, Jakarta

The Association of Indonesian Businessmen (Apindo) proposed to the government on Wednesday that workers' minimum wages be evaluated every two years rather than every year as is currently done.

"Raising minimum wages every year will only make both the employers and workers busy discussing them," Apindo's vice chairman, Hariadi Sukamdani, said after meeting with President Megawati Soekarnoputri at the State Palace.

The annual change in the minimum wage requires Apindo, the labor unions and the ministry of manpower to take a large chunk of time to meet in a tripartite forum every year to discuss the wages for the next year, Hariadi said.

Apindo's Jakarta branch filed a suit late last year with the State Administrative Court in Jakarta, which later issued an injunction delaying the implementation of Jakarta's gubernatorial decree stipulating an increase in the minimum wage from Rp 426,250 to Rp 591,266 per month.

On Jan. 9, 2002, however, the injunction was overturned by the court, even though businessmen, who claim to be unable to afford to pay the new minimum wage, insisted on retaining the right to file an objection with the government to obtain a grace period.

The wage increase, which also applies to other provinces throughout the country with an average hike of 30 percent, took effect on Jan. 1, 2002.

The regional wage increases have stirred problems nationwide as workers went on strike and others scaled back their productivity.

The businessmen have warned that the policy will cause massive unemployment as many of the businesses will not be able to afford the increased wages along with the government's plan to raise fuel prices and electricity tariffs.

"If the minimum wages are determined every two years, we will have more time to thoroughly discuss the wages," Hariadi argued.

Apindo, he said, wants the increase to be adjusted based on the inflation rate which hovers between 8 percent and 11 percent a year.

In the meeting with the President, Apindo urged the government to review the all labor laws in order to resolve employee and employer issues, thus creating a business environment more conducive to cooperation.