Jakarta minimum wage to increase by 6 percent

Damar Harsanto, The Jakarta Post/Jakarta

Jakarta's provincial minimum wage increase is likely to be approved at 6 percent, a wage of Rp 711,843 (US$78.23), after the provincial wage council voted at a meeting on Thursday, minus all seven members of the Workers Association.

"We decided to walk out of the meeting because the council insisted on voting for the proposed increased wage while we insisted that the new wage met with the official minimum cost of living allowance (KHM) of Rp 759,953," Wajis A. Mangkonna, a workers representative, told The Jakarta Post after the meeting.

The KHM, which would have represented a 13 percent increase, was based on a survey in July conducted by a tripartite council comprising seven representatives each from the Jakarta administration and the employers and workers associations.

The council decided to put the wage to a vote after members failed to reach a consensus in meetings on Monday and last Friday. At Thursday's meeting, the council declared the seven representatives of the Workers Association had abstained from voting.

But the workers association rejected the result.

In a statement signed by the seven members -- ARK Bellyonardi, Soeparman, Gibson Sihombing, Wajis A. Mangkonna, Syawal Harahap, Djarwadi Djenal and Haryono -- the association called on Jakarta Governor Sutiyoso to reject the increase.

"We call on the governor only to approve the proposed increase to a wage of Rp 759,963," they said.

Sutiyoso promised his administration would not approve the increase until the opposing parties reached a consensus.

"I won't intervene in the bickering since the administration's role is only as a mediator. Let they (the council) solve their internal dispute first," he said.

However, Sutiyoso's subordinate, Jakarta Manpower Agency head Ali Zubeir, seemed to be in favor of the voting result.

He said small firms would go bankrupt if the administration imposed a too-high minimum wage they could not afford.

"Around 600,000 people in the city are still jobless. That's why we must accommodate the plea of the smaller companies (for a lower increase)," he said.

If approved, the proposed wage would be lower than the one mentioned in circular issued by then Manpower Minister Jacob Nuwa Wea on July 16. It called on governors nationwide to increase the respective minimum wage to at least KHM levels.

"That (letter) is only a reference. It is not a ruling to implement. We must use it in accordance with the real situation of companies here," Ali said.

Indonesian Employers Association chairman Sofjan Wanandi had said earlier employers would tolerate the increase as long as it did not exceed the inflation rate in Jakarta, which was predicted to be at 6.50 percent this year.

He also said should there be no compromise, voting would be the only way to solve the debate.

The 2004 minimum wage is set at Rp 671,550 after a 6.3 percent increase from last year's Rp 631,000.