Batam minimum wage hike gets mixed reaction

Fadli, The Jakarta Post, Batam

A five percent increase in the minimum wage in Batam has sparked mixed reactions from employers, local authorities, labor unions and workers.

Netty Herawaty, chairwoman of the local chapter of the Federation of All-Indonesian Workers Union (FSPSI), said she regretted the low hike in the minimum wage that would certainly put workers in a worse condition.

"Like previous years, the increase in the minimum wage will certainly cause a high rise of index prices that will, in turn, effect workers' purchasing power," she told The Jakarta Post here on Friday.

Riau Governor Saleh Djasit issued a decree on Thursday to increase the minimum wage by five percent to Rp 535,000 (US$53.5) for the 2002 fiscal year from the current Rp 510,000 ($51). The minimum wage prevails only for workers employed less than a year.

The decree also mandates that workers employed more than two years were paid Rp 545,7000, while those who have worked for seven years or more will be paid Rp 609,900.

Netty said the low increase was not real because, besides uncovering the inflation rate, it would not enable workers to meet their daily needs.

"If the government is consistent with the inflation rate of around ten percent this year, it should increase the minimum wage by at least 20 percent to allow workers to enjoy it," she said.

Instead, Netty proposed provisions for housing and transportation, both of which have raised serious problems for workers on the island.

"Most workers have to spend a part of their monthly wage for transportation, and have to rent inhumane huts because the costly rent houses on the island," he said, citing the fact that most industries in Batam did not offer housing or dormitory and transportation for their employees.

Bambang Yulianto, chairman of the local chapter of the Indonesian Prosperous Labor Union (SBSI), condemned the low hike in the minimum wages which, he said, would bring more suffering to workers on the island.

"If the local government is consistent with the Manpower and Transmigration Minister's circular on the monthly minimum wage, the minimum wage should be set equal with the minimum physical need of Rp 780,000 on the island," he said.

Minister of Manpower and Transmigration Yacob Nua Wea issued a circular to all provinces recently, calling on governors to set the minimum wages at least equal with their own physical need.

Nasir Harun, chairman of the local chapter of the Indonesian Employers Association (Apindo) said the increase by five percent was really a limit of local employers' capability of paying their workers.

"An increase higher than the one set by the governor could lead to massive labor dismissal that will effect not both employers and workers themselves," he said.

Arifin, chief of the local manpower and transmigration office, appreciated the governor's decree to help maintain the labor condition and companies' competitiveness.

"The government is in a neutral position," he said. "It must give an adequate attention, not only to workers, but also to employers and its own interests in a conducive climate for investment in the province, including Batam."