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)