Govt urged not to raise minimum wage this year

JAKARTA (JP): Industry associations urged the government not to raise the minimum daily wage, but said if it could not be avoided the increase should be circumvented from the monthly fee companies have to pay to the state workers insurance company PT Jamsostek.

Aprisindo (Association of All Indonesian Shoe Industries), API (Indonesian Textile Association), AMI (Association of Indonesian Manufacturing Companies), and APMI (Association of Indonesian Toy Industries) issued a joint statement yesterday saying that companies would find it difficult to raise wages due to the dire economic situation.

In their statement, four labor-intensive associations said they would not mind if the government set a new minimum workers' wage, known as the UMR.

"But the government must address the many external factors that hamper companies from being able to pay the wage," the statement said.

The association agreed to focus on "rampant illegal levies, the rising cost of energy and the increasing interest of bank loans" as examples of the uncontrollable external factors, which they said have caused inefficiency.

"The government should make this more realistic," said the statement read by Hariyadi B. Sukamdani of the Indonesian Textile Association during a discussion on the minimum wage which was also attended by representatives from the All-Indonesia Workers Union Federation (FSPSI) and the government.

The discussion was held at the Ministry of Industry and Trade.

The minimum wage differs from one area of the country to another. The minimum monthly wage in Greater Jakarta is Rp 172,000.

The highest minimum level paid is for those working in the industrial-designated zone of Batam, Riau, at Rp 220,500.

Yogyakarta still has the lowest minimum wage level at Rp 106,500.

Director General of Labor Supervision of the Ministry of Manpower Syaufi'i Syamsuddin, representing the government, said he would consider the associations' proposal including channeling payment of Jamsostek funds to workers' wages.

"I will report this to the minister. But I think the fact that not all companies join the Jamsostek program will be a problem," he said.

Funds

According to Law No. 3/1992 on Jamsostek, every company should join the Jamsostek program.

Jamsostek funds, with assets of Rp 5 trillion (US$715 million), is managed by PT Jamsostek.

Companies must pay about 7 percent of the basic salary of a worker to Jamsostek each month.

Chairman of AMI, Hars Djoemena, said the idea of channeling Jamsostek funds to help increase wages was ideal since it "would not need the government's money, nor overburden workers or crisis-hit companies".

"The fact that not all companies join the Jamsostek program is no grounds for this proposal to be rejected," he said.

The use of Jamsostek funds came under public scrutiny recently after it was discovered that Minister of Manpower Abdul Latief had allocated funds from the insurance company to help pay for deliberations on a controversial manpower bill by legislators.

Latief later claimed that he did it under order from President Soeharto.

Deputy chairman of FSPSI, Rustam Aksam, said the government must raise this year's minimum wage by at least 13 percent to allow workers to meet their basic needs.

"Businesspeople should not see the hike as a business cost, but rather a social cost," he said.

"We must think about the possible social upheavals that could break out (should workers not get a wage rise). A bigger cost will have to be paid," he warned. (aan/gis)