Invisible costs blamed for low wages
Invisible costs blamed for low wages
Ridwan Max Sijabat, The Jakarta Post, Jakarta
A labor observer and a human rights activist are calling on the
government to fight the high-cost economy, which employers say is
preventing them from paying workers fairly and in accordance with
the law.
Bomer Pasaribu, a former manpower minister, said most
employers could not pay their employees better salaries because
they had to pay off government and military officials, political
parties, mass organizations and hoodlums.
"Most businesspeople will have a hard time in the next two
months not only because they have to pay annual bonuses to their
workers and redesign their labor costs in line with the planned
increase in minimum wages as of Jan. 1, 2004, but also because
they have to allocate more funds for unexpected expenditures," he
told The Jakarta Post here on Wednesday.
He was commenting on the contentious increase in the monthly
minimum wage in Jakarta and its outskirts to Rp 671,000 (US$79) a
month in 2004 from the current Rp 631,000.
Bomer, who chairs the Center for Labor Development Studies
(CLDS), quoted a CLDS survey in May which revealed that most
companies allocated between 20 percent and 30 percent of their
total budgets for labor, a half of which was spent on invisible
costs.
Solahuddin Wahid, deputy chairman of the National Commission
of Human Rights, said the minimum wage issue was complicated.
He declined to say the minimum wage ran contrary to the human
rights law and the 1945 Constitution because it depended much on
employers' financial capabilities.
"It is impossible to force employers to comply with the
minimum wage regulations if they are unable to do so. If
investors close down their companies or relocate to other
countries this will also leave many workers unemployed and
disrupt the political situation," he said.
He said the right body was throwing its weight behind
employers' nationwide antibribe campaign to minimize the high-
cost economy.
Hit by the decline in Indonesia's competitiveness in the
international market, the Indonesian Employers Association
(Apindo) said invisible costs in the economy prevented some
employers from paying workers in accordance with the law.
"The invisible costs are another factor, but the amount is no
more than the annual bonuses employers pay their workers," Apindo
deputy chairman Hariyadi Sukamdani said.
Hariyadi, who is also president of the Sahid Hotel Holding
Group, declined to disclose the amount of invisible costs his
group had to pay to third parties.
Asked whether employers were hiding behind these invisible
costs to avoid paying their workers fair wages, Hariyadi said the
media should investigate the issue.
Apindo secretary-general Djimanto said that besides giving
bonuses, gifts and frequent bribes, businesspeople were also
subject to illegal fees starting from the time they applied for
investment licenses all the way through to the export process.
"The high-cost economy has been a chronic disease that has
plagued the nation since the New Order era," he said.
He noted that with regional autonomy, investors faced not only
central government officials, but also the "new small but
powerful kings in the regions" such as governors, regents and
other local elites.
Many labor unions have called the new minimum wages
unrealistically low and inhumane.
The Confederation of Indonesian Prosperity Labor Union (KSBSI)
has threatened to sue Jakarta Governor Sutiyoso in the State
Administrative Court for signing the minimum wage regulation in
Jakarta.
The confederation said the minimum wage violated Law No.
13/2003, which stipulates the monthly minimum wage must be
sufficient to allow workers to "live decently".
"None of the components used to set the minimum wage match the
commodity price index," the confederation said.
Bomer agreed that the wage components did not match the
current situation in terms of price, quantity and quality.
According to the confederation, a single worker needs to earn
Rp 1.3 million a month, not Rp 690,000, to rent a room, purchase
about 20 kilograms of rice, four kilograms of meat, four
kilograms of eggs, two sets of clothes and other secondary and
tertiary needs.
Wage parameters according to government's monthly minimum needs
A. Food and beverages:
1. Rice 12 kilograms Rp 38,400
2. Meat 75 grams Rp 15,000
3. Fish 1.2 kg Rp 9,000
4. Nuts 1.5 kg Rp 3,300
5. Sugar 3 kg Rp 10,500
6. Palm oil 1.5 kg Rp 6,750
7. Vegetables 7.2 kg Rp 13,680
8. Fruits 7.5 kg Rp 31,875
9. Snack 6 kg Rp 2,350
10. Coffee 0.5 kg -
11. Tea 0.3 kg -
B. Housing:
1. Simple rental room Rp 50,000
2. Bed Rp 10,000
3. Pillow Rp 5,000
4. Bed cover Rp 11,000
5. Furniture Rp 13,889
6. Plates Rp 500
7. Glasses Rp 250
8. Kettle Rp 1,750
9. Woks Rp 750
10. Pans Rp 2,500
11. Kerosene-fueled brazier Rp 2,500
12. Kerosene 10 liters -
13. Mat Rp 1,250
14. Electricity --
15. Light bulbs 3 Rp 9,000
16. Washing soap 1.5 kg ---
C. Clothes
1. Trousers/dress 3 pieces Rp 7,500
2. Shirts 3 pieces Rp 7,500
3. T-shirts 3 pieces Rp 2,000
4. Sarong 1 piece Rp 2,500
5. Underpants 4 pieces Rp 1,333
6. Bras 2 pieces Rp 2,000
7. Shoes 2 pairs Rp 5,000
8. Sandals 2 pairs Rp 1,000
9. Towels 2 pieces Rp 1,666
D. Other tertiary needs
1. Toothpaste 2 units --
2. Bath soap 2 packs --
3. Toothbrush 2 units
4. Hair cuts one --
5. Newspaper one copy a month
6. Entertainment once a month to go
to non-airconditioned
theater --