Everyone needs to calm down
The Jakarta administration decided recently to increase the minimum wage for this province to Rp 591,600, or less than US$60, from Rp 426,250. The 38 percent increase was stipulated in a gubernatorial decision signed on Oct. 31. The increase is rather significant in the current sluggish economy because the old wage covered only 81 per cent of the monthly cost of living for a single person in Jakarta.
Jakarta Governor Sutiyoso said last week that the step had been taken after listening to the opinions of many parties, including employers and neutral experts from the University of Indonesia. He said that, in deciding upon the wage rise, the authorities had made a serious attempt to ensure that it would not have a negative impact on the business sector. He expected employers to implement the new regulation and exercise the wisdom of openness so that everything would be clear.
Yet, Apindo, the Indonesian Employers Association, reacted by saying last Thursday that it would not pay the new minimum wage set by the Jakarta authorities because the decree had been decided unilaterally. It said that the association would quit the Wage Commission at its next meeting because "the Commission had ceased to function." Apindo's statement was drafted in a meeting with its 14 board members in Jakarta on that day. "It is useless to attend the Commission meeting because the authorities have always taken the side of the workers and turned a deaf ear to us," said Suwito, one of the executives who had represented the Association in meetings with the government.
Meanwhile, the Chairman of the Indonesian Retail Merchants' Association (Aprindo), Hari Darmawan, told a press conference on the same day that businesspeople were still attempting to recover from the various catastrophes that had followed the 1997 economic crisis. In addition, they were now also feeling the pinch as a result of the Sept. 11 terrorist attacks in the United States, which had heavily hit business in general.
"Last year, amid all our economic difficulties and low profit margins, we agreed to a Rp 426,250 minimum wage compared to the previous year's minimum wage of Rp 350,000. This proposed increase is devastating for us," Hari, who owns the Matahari chain of department stores, said.
Every thinking citizen in this country fully understands the current devastating economic crisis as well the reality that the problem with our blue collar workers -- and also civil servants -- has dragged on and on for decades. Labor has been the main victim of the system, especially when the military regime of president Soeharto not only showed no hesitation in using troops to rob the labor unions of their bargaining position to improve the welfare of their members but also to brutally emasculate them.
We also understand the complaints of the employers, who have always viewed the issue from the business point of view but fall short of mentioning any efforts they have made to improve the welfare of their workers.
We also underline Governor's Sutiyoso's statement urging the employers to be open in resolving their problem with the workers. But Sutiyoso failed to elaborate on his statement by, for example, urging the businesspeople to mention their profit margins and lay bare all the illegal levies imposed on them by corrupt officials.
The governor, who has to face constant labor problems in his jurisdiction, seems to be badly in need of a strong economic team so that his administration can delve deep into the problem.
But above all, what needs to happen today is for every party to accept the Jakarta administration's decision because it has been decided through democratic deliberation and has therefore become law.