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.