Fair share for labor
The government's decision to freeze official minimum wages at 1997 levels, while widely expected, is a blow to Indonesia's labor movement nevertheless. It is a major setback after years of hard work to try to ensure that workers get their minimum fair share. Most people have taken it for granted that official minimum wages would be increased annually, first, to keep up with inflation, and second and more importantly, to bring them up to what are regarded as minimum subsistence levels.
With inflation clocking in at 17 percent for 1997 and surpassing 20 percent in the first three months of 1998, the goal of setting more humane wage levels has drifted from the nation's grasp once again. Barring a miracle, the government's promise to increase minimum wages to subsistence levels by the end of the Sixth Five-Year Development Plan in March 1999 is unlikely to be met.
Minister of Manpower Theo L. Sambuaga, who announced the decision Monday, could not have made a worse start. His predecessor Abdul Latief, now shifted to minister of tourism, had increased minimum wages each year, at times even by leaps and bounds, during his five-year tenure.
This, however, is an unfair comparison. The government should have decided on the size of the minimum wage increases in December. But negotiations between the government and representatives of employers and workers became stalled, first by the severe economic crisis, and later by the General Session of the People's Consultative Assembly (MPR) and the naming of the new cabinet. This was a politically controversial decision that Latief should have made. One can only suspect that the delay was deliberate to avoid possible upheavals in the run-up to the MPR session.
The government's decision to freeze the minimum wage levels on the pretext of the economic crisis raises the question of whether people's subsistence -- which literally means the difference between life and death -- should depend on what happens in the economy. The government and employers seem to think so. The decision may be pragmatic as employers say they cannot pay any minimum wage increases. But since official minimum wages are still below subsistence levels, this raises doubts about the government's commitment to improve the welfare of workers.
The government, if it had wanted to, could have raised minimum wages while exempting financially troubled companies from the ruling. This, after all, is permitted under the regulation and has been practiced in the past. The number of companies applying for exemption would likely soar this year, but the government would not be seen as compromising on its commitment. In fact, by doing this, the new cabinet would have sent a clear signal on where it stands when it comes to the plight of workers.
Given the increasing number of workers laid off as the recession bites deeper, most people would feel fortunate to have jobs. They probably would not insist on pushing for what is rightfully theirs. Some who have jobs have even taken pay cuts to help their companies survive. All these however should not detract us from the goal of setting more acceptable and humane minimum wage levels.
The decision to freeze minimum wages also makes it imperative for the government to once and for all take strong action to eliminate "invisible" costs that have haunted the business world. Employers have long complained that these costs -- levies by various government agencies, official or otherwise -- have undercut competitiveness and prevented them from paying better salaries to their workers.
If the government cannot increase minimum wage levels now, the least it could do is to resume its campaign to eliminate these levies, this time pursuing it with greater vigor than it has shown in the past. There are many ways of easing the plight of workers in times of crisis. We believe eliminating these levies is one, and probably the most effective, of them all.