Employers reject 'irrational' salary rise demand by workers

Employers reject 'irrational' salary rise demand by workers

Bambang Nurbianto, The Jakarta Post, Jakarta

The Indonesian Employers Association (Apindo) rejected on Monday
the demand by Jakarta workers for the minimum wage to be
increased from the current Rp 711,834 to Rp 1.2 million, saying
that the demand was irrational.

Apindo Secretary-General Jimanto said that according to
Minister of Manpower and Transmigration Regulation No. 17/2005,
when setting the minimum wage, job market conditions and the
capabilities of employers also needed to be considered.

"If we follow the regulation, the Jakarta minimum wage should
be reduced, not increased," Jimanto was quoted by Antara as
saying on Monday.

According to Jimanto, using home industries, such as bakers
and cleaning services, in the city as yardsticks, the Jakarta
minimum wage should be Rp 500,000 per month, not Rp 711,843.

He said that not only workers were affected by the fuel price
hikes but also employers.

"If firms have to pay higher wages, many will go bankrupt
soon," he added.

Meanwhile, Governor Sutiyoso called on the Jakarta
Remuneration Council on Monday to soon issue a recommendation on
the issue so as to serve as a reference for him in setting the
city's minimum wage.

Under the prevailing regulations, the minimum wage is set by
the governor based on a recommendation issued by a tripartite
committee consisting of workers, employers and the Jakarta Labor
Agency.

Sutiyoso refused to comment on the figure demanded by workers,
saying that the city administration would listen to the arguments
put forward by all sides, particularly representatives of workers
and employers.

"Before making a decision, the city administration needs to
listen to the views of the groups represented on the Jakarta
Remuneration Council," the governor told journalists at City Hall
on Monday.

The All Jakarta Workers Confederation demanded over the
weekend that the administration increase the minimum wage for
2006 to Rp 1.2 million per month compared to the current Rp
711,843.

In a press statement issued on Saturday, the workers said that
the central government had twice increased fuel prices in 2005,
while the minimum wage had never been increased.

The government raised fuel prices in March and October
respectively.

The workers said that the purchasing power of Jakarta workers
had declined significantly following the recent fuel price
increases as the majority of firms had not increased wages.

The latest increase in the Jakarta minimum wage took place in
November 2004, when it was increased from Rp 671,550 to Rp
711,843. At that time, the workers' side rejected the decision,
saying the minimum cost of living in the city was around Rp
759,953.