Jakarta to increase minimum wage to Rp 819,100 in 2006
Jakarta to increase minimum wage to Rp 819,100 in 2006
Damar Harsanto, The Jakarta Post/Jakarta
As an Idul Fitri 'gift' for low-paid workers in Jakarta, the
Jakarta administration has increased the minimum wage to Rp
819,100 (about US$81) for 2006, an increase of 15 percent from
the current Rp 711,843.
The increase, however, is much lower than the Rp 1,203,015
demanded by labor unions.
The 15 percent increase granted by the administration is below
the inflation rate between January and October this year of 15.65
percent.
"Please bear in mind that the minimum wage is the lowest that
can be paid by businesses in the city. Hopefully, larger and
stronger companies will pay slightly higher than the minimum
wage," Jakarta Governor Sutiyoso told reporters at City Hall.
The minimum wage is only applied for workers whose working
experience is less than one year.
Sutiyoso said that the new minimum wage was in line with the
recommendation lodged by the tripartite Jakarta Wage Council
comprising representatives from the associations of employers,
labor unions and the Jakarta Manpower Agency.
Jakarta Manpower Agency head Ali Zubeir called on any ailing
businesses that may find it difficult to pay the new minimum wage
to immediately request a dispensation from the agency.
"We have set a deadline for such companies to file their
dispensation requests 10 days at the latest before the full
implementation of the minimum wage," Ali said.
The new minimum wage will become effective on Jan. 1, 2006.
According to Ali, companies requesting dispensation that
employ more than 1,000 workers must agree to be audited by
independent auditors. The companies must also shoulder the
expense of the audit.
"In addition, the request must be made in consultation with
labor unions in the respective companies," he added.
The agency said there were about 3.5 million workers in 25,000
companies across the capital.
Secretary general of Association of Indonesian Retailers
(Aperindo) Handaka Santosa said he could accept the increase in
the minimum wage.
"We can understand that the increase is due to ballooning
living costs of workers. The most important thing is how both
parties, employers as well as workers, can work together to
weather rising operational and production costs in order that
businesses survive the crisis," Handaka told The Jakarta Post.
He also urged the administration to eradicate illegal fees
imposed on companies.
Some employers said that the recent fuel price hikes have
increased production costs at some enterprises, especially
manufacturing industries in the city, by up to 15 percent.
The government has increased the price of premium fuel for
industry by 21.8 percent to Rp 6,290 per liter. Diesel fuel rose
by 12.14 percent from Rp 5,300 to Rp 6,000, while kerosene went
up by 14.28 percent from Rp 5,600 to Rp 6,400.
Meanwhile, chairman of the Jakarta chapter of the Association
for Workers (Aspek) Gibson Nababan acknowledged that the wage
increase was below what they had demanded.
"It's the best we could do. But, we also urge the
administration to help mediate between labor unions and employers
in negotiations for the new provincial minimum wage for certain
sectors, or UMS," Gibson said.
Labor unions have long demanded that the administration set
higher minimum wages for specific sectors deemed to be healthy,
like hotels, automotive industries and metal industries.