Government fails to enforce new minimum wage ruling
Government fails to enforce new minimum wage ruling
Ridwan Max Sijabat, The Jakarta Post/Jakarta
The government has acknowledged that labor oversupply and the
prolonged economic crisis have prevented it from enacting the new
ruling on minimum wages.
According to Law No. 13/2003 on manpower, minimum wages should
be calculated according to basic humane physical needs (KHL),
rather than the current consideration of basic needs (KHM).
Ministry of Manpower and Transmigration spokesman Hotma
Panjaitan, said here on Tuesday that 2005 was not the right time
for workers to enjoy a wage hike. He said that while the new
labor law came into effect early this year, the enactment of the
ruling on provincial minimum wages -- based on basic humane
physical needs -- had been suspended until January 2006.
"Yet, the government calls on all employers to accept the
minimum wages, which are based on basic needs, because, so far,
only 10 of 30 provinces have adopted wages based on humane
physical needs.This condition is the result of labor oversupply,
the prolonged economic crisis and Indonesia's unhealthy business
climate," he said.
Hotma said the manpower minister had issued a decree to
suspend the enactment of the new ruling in response to employers'
complaints about the unfavorable investment climate here.
He said most complaints stemmed from the high-cost economy,
lack of legal certainty, damaged infrastructure and security
disturbances.
"We cannot ask foreign investors to invest in Indonesia to
generate job opportunities and accommodate the rapid growth of
the workforce, which has reached more than 100 million," he said.
The unemployment rate, including underemployment, has
surpassed 43 million.
Minimum wage levels based on humane physical needs are far
higher as the category calls for 50 wage components, while wages
based on basic needs alone call for only 43 components. The
minimum wage differs from one province to another due to
differing price indexes and average per capita income.
Hotma said that the minimum wage was intended to act as a
social safety net for single workers, regardless of their
educational background, qualifications or work experience.
"Employers should pay their workers the minimum wage at the
least -- paying them more would be better," he said.
So far, the government has raised wages in 14 provinces by an
average of 11.25 percent. The remaining 16 provinces, including
North Sumatra, East Java and Papua, are expected to set their
minimum wages in the middle of this month.
Minimum wages in 14 provinces
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Minimum wages
No Province 2005 2004 hike percentage
=================================================================
1. Aceh Rp 620,000 Rp 550,000 12.73%
2. West Sumatra 540,000 480,000 12.50%
3. Riau 551,500 476,875 15.65%
4. Bangka-Belitung 560,000 447,923 25%
5. Bengkulu 430,000 363,000 18%
6. West Java 408,260 366,500 11.39%
7. Jakarta & outskirts 711,843 671,550 6%
8. Yogyakarta 400,000 365,000 9.59%
9. Bali 447,500 425,000 5.29%
10. West Kalimantan 445,200 420,000 6%
11. South Kalimantan 536,300 482,250 11.22%
12. East Kalimantan 600,000 572,652 4.78%
13. Southeast Sulawesi 498,600 450,000 6%
14. South Sulawesi 510,000 455,000 12.09%
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Source: Ministry of Manpower and Transmigration