Apindo proposes biennial wage hike

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.