Jakarta minimum wage up by US$4

Jakarta minimum wage up by US$4

Damar Harsanto, The Jakarta Post/Jakarta

With a monthly salary of Rp 600,000 (US$66), Adi, who works as a
factory worker, has to work overtime, sometimes until 1 a.m., to
bring home around Rp 1 million per month so that his wife and two
children can have a decent life.

His base salary is below the provincial minimum wage set by
the Jakarta administration of Rp 671,550.

Adi's dream, and the dreams of other low-paid workers, of
having higher salaries could be shattered after the
administration's decision to increase the minimum wage by Rp
40,293 (just over $4) to just Rp 711,843, for the year 2005,
which is considered to be lower than the average cost of living
in Jakarta.

"Governor Sutiyoso has approved the proposed hike. He will
soon announce the new minimum wage figure on Saturday or Monday,"
Assistant to City Secretary for People's Welfare, Rohana
Manggala, told The Jakarta Post at City Hall on Friday.

Sutiyoso confirmed Rohana's statement, saying he did not find
any significant obstacles that could delay the approval of the
increase.

"The proposed hike was agreed upon after a valid voting
process. I have no reason to delay the proposal," he told the
press.

His statement contradicted his own made on Thursday. Sutiyoso
had said earlier that he would not approve the proposed hike as
the vote was marred by a walkout from the seven representatives
of the workers' association.

Fourteen representatives from the administration and the
employer's association went ahead with the vote and approved the
Rp 711,843 wage, while considering the workers' representatives
votes to be abstentions.

The workers' representatives walked out of Thursday's meeting
in protest of the proposed minimum wage, because it is lower than
the official minimum cost of living allowance (KHM) of Rp
759,953.

The KHM was based on a joint survey made in July 2004 by
representatives of the administration, employer's associations
and workers' associations.

The Jakarta Manpower Agency head Ali Zubeir admitted that the
proposed increase fell short of the amount called for in a memo
issued by the Manpower Minister on July 16, in which governors
nationwide were asked to increase the minimum wage in their
respective areas to the level of the KHM.

"However, we must also consider the adverse impact on
businesses if we insist upon demanding higher wages," Ali said.

He pointed to the unemployment numbers in Jakarta, which rose
by 20 percent from 500,000 last year to 600,000 this year.

"We don't want to see more companies relocate their plants to
other cities, or other countries, due to unaffordable labor
costs. The workers will eventually lose their jobs too," he said.

Meanwhile, regardless of how the negotiations end up, it seems
Adi will still have to work very long hours next year in order to
feed his family.