Govt urged not to raise minimum wage this year

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)