End minimum wage system, says Union

End minimum wage system, says Union

CIANJUR, West Java (JP): The splinter faction of the
Federation of All Indonesian Workers Union (FSPSI Reformasi) will
fight for replacement of the monthly minimum wage with a market-
based remuneration system, a newly elected executive said on
Wednesday.

Secretary-general Mohammad Rodja argued the minimum wage
approach should be discontinued because it had failed to improve
workers' welfare.

"What have workers gained from the economic growth of around 7
percent during the last three decades? They remain poor and
backward. And now, they are part of a vulnerable group worst hit
by the crisis," he told The Jakarta Post after the closing
ceremony of the new labor union's four-day congress here.

To the distress of the original FSPSI, the government has
recognized FSPSI Reformasi, citing the International Labor
Organization's convention on freedom of association, which has
been ratified.

The splinter faction is supported by 11 out of 13 sectoral
unions.

Rodja said workers' purchasing power had drastically weakened
following skyrocketing prices of basic commodities.

Minimum monthly wages vary according to area. The lowest is Rp
122,500 (Southeast Sulawesi, East Nusa Tenggara and Yogyakarta),
and the highest Rp 270,000 (Batam).

Rodja said FSPSI Reformasi would also seek for labor costs to
reach at least 20 percent of companies' production costs.

The matter -- which he said would have to be raised in
negotiations with management on drafting collective labor
agreements -- would help improve workers' skills and income.

"Most workers cannot develop their career and improve their
skills because their companies have allocated their labor costs
at only about 5 percent of their production cost."

It is ironic that minimum wages in Indonesia are far lower
than those in Malaysia, Singapore, the Philippines, Thailand and
China, Rodja added.

This year should be the last for the minimum wage system, at
least in multinational corporations and joint venture companies.

He characterized it as unfair that multinationals such as
hotels and manufacturing firms were still implementing the
minimum wage system when they paid their workers overseas far
higher remuneration.

Rodja, outgoing deputy chairman of the trade union in the
textile and leather sector, continued that FSPSI Reformasi would
also set up cooperatives whose short-term program would help
supply basic commodities to workers.

The federation recently signed a cooperation agreement with
the State Logistics Agency (Bulog) to allow the cooperatives to
directly supply basic commodities from Bulog to workers.

Rodja said the federation would also fight to reform the
social security program, run by state-owned PT Jamsostek, to
provide maximum benefit to workers.

"We want the company and the social security program to be
managed by a tripartite management representing workers, employ
ers and the government." He said PT Jamsostek could not be
treated the way the government handled other state-owned
companies, which were inevitably oriented to make profits,
because its assets came from insurance premiums paid by workers.

"The company's profit, therefore, should not be given to the
government, but be returned to accumulate its assets to improve
benefits for workers."

He said a victim of a work-related accident who suffered
debilitating injuries should receive compensation of Rp 75
million, instead of the usual Rp 1.5 million to Rp 2
million. (rms)