Govt set to increase minimum wages

JAKARTA (JP): Minister of Manpower Fahmi Idris is expected to announce increases in the official minimum wages this week, a member of his staff said yesterday, Antara reported.

Director General of Guidance and Supervision Syaufie Syamsuddin told reporters that the increases had been decided after consultations with representatives of workers and employers.

Syaufie admitted official minimum wages had been eaten away by inflation.

If they represented 92.5 percent of the minimum subsistence level in 1997, now, after inflation, they represented a mere 65 percent, he said.

The government traditionally increases minimum wages on April 1. But because of the economic crisis affecting many companies, the previous manpower minister, Theo Sambuaga, decided to freeze all increases indefinitely, overruling objections from trade unions.

The government sets different minimum wages for different provinces in accordance with the local standards of living.

The current minimum monthly wage for a worker in the Greater Jakarta Area is Rp 172,500 (US$11.50). Batam has the highest minimum wage, Rp 235,000, reflecting the high cost of living there. Yogyakarta has the lowest, Rp 106,500.

The inflation rate last year was 17 percent, while the rate for the first five months of 1998 has already exceeded 40 percent. Economists predict inflation to reach 100 percent in all 1998. (emb)