Employers objects the increase of workers' minimum wage

Annastashya Emmanuelle, The Jakarta Post, Jakarta

Workers' hopes of enjoying a 38.7 percent increase in the minimum wage here next year will likely not materialize as employers have rejected the hike.

The Indonesian Employees Association (Apindo) even threatened to sue Jakarta Governor Sutiyoso at the Jakarta State Administrative Court for issuing a decree increasing the provincial minimum wage from Rp 426,250 to Rp 591,266, starting next year.

Not only did they reject the decree, they also claimed that they had never approved the increase during the meeting between labor unions, employers and officials from the Ministry of Manpower.

Representatives from Apindo and the Jakarta Chamber of Commerce and Industry (Kadin) who were present at the meeting said they did not sign any agreement on the proposed increase, and therefore the decision was made without their consent.

"In the meeting, we stuck to our proposal of Rp 490,000 per month, and didn't sign anything. The new minimum wage was decided entirely by the government and the labor unions," Anita Gizelle, from the Jakarta Chamber of Commerce and Industry told employers from various business sectors in a gathering convened by Apindo and Kadin.

An executive of the Indonesian Retail Merchants Association said last week that employers represented in the city's wage committee only approved the steep wage increase due to the limited time allowed for negotiations with the other parties involved.

According to the gubernatorial decree on the provincial minimum wage, the increase is to take effect on January 2002.

Labor unions had proposed the sum of Rp 600,000, which they arrived at based on results of a basic needs survey.

According to the deputy chairman of Apkindo, Haryadi Sukamdani, the reason for taking the case to court was to stall the scheduled implementation of the decree early next year, thus buying time for further negotiation until the court reached a verdict.

"We will file the suit as soon as possible since January is very near ... meanwhile, we'll also review our participation in the committee. As we have often been disregarded, we are considering withdrawing from the committee," Haryadi told reporters on the sidelines of the discussion.

Meanwhile, businesspeople at the gathering agreed to oppose the new ruling on the grounds that the economy had not yet recovered.

"In time, this would kill the manufacturers in Jakarta and with that comes massive unemployment," said Toto, from the Electric Cable Manufacturers Association.

Another businessman said that the government was unable to accommodate the interests of all sides and often failed to take into account the situation of employers.

"Perhaps this kind of proposal could be considered if the government was willing to postpone the increase in fuel and electricity rates which will also take place next year," Asima Sitorus from the Association of Synthetic Fiber Producers commented.

Sutiyoso had earlier rejected the review of the decree on the 2002 minimum wage, but allowed employers who could not afford the hike to file an objection and send in their financial reports.