Latief criticizes businessmen angry over wage decree

JAKARTA (JP): Minister of Manpower Abdul Latief called over 400 entrepreneurs arrogant yesterday for threatening to sue him for raising the minimum wage by 10.6 percent as of this month.

The leader of the Federation of All Indonesian Workers Union (FSPSI), Bomer Pasaribu, also criticized the businesspeople, and praised the new wage policy as an effort to end the exploitation of Indonesian workers.

Latief affirmed the government would not back down on the new ruling because the decree helps improve the welfare of workers.

"We will stick to our guns. Companies who have financial trouble implementing the ruling may seek to postpone raising their workers' wages through legal procedures," he said in an interview with The Jakarta Post.

Labor-intensive small and medium-scale companies object to the new minimum wage standard on the grounds that it could bankrupt them.

Around 400 companies, all claiming to be in financial trouble and led by the Indonesian Textile Association, have threatened to sue the manpower minister for his decree.

The January decree, which became effective on April 1, increased the daily minimum wage by 10.63 percent. It also stipulates that the monthly salary of permanent workers accounts for 30 working days, not 26 days.

Pointing to exploitation in the textile industry, Latief said that 80 percent of textile workers are kept on daily wages for years.

"Many of them have been even employed under such a status for 15 years," he said.

The textile association said recently that many companies in its organization faced economic difficulties because of fiercer competition on the world market and the rising price of imported raw materials.

The minister, who is also president of the Alatif Corporation, said no company has ever gone bankrupt after increasing its workers' wages.

"It is true that many companies get into financial trouble or even go bankrupt because of mismanagement or the inability to compete in the market," he said.

He warned that the government will drop the cheap-labor policy it pursued for the past 25 years to attract foreign investment.

"In entering the free trade era, both companies and workers must be professional to be able to produce more competitive products," he said.

He admitted that the current minimum wage level is still low.

"I am not seeking popularity from the minimum wage issue because I was popular before being appointed minister by the President three years ago. I just want to improve labor conditions," he insisted.

Separately, FSPSI chairman Bomer Pasaribu said that employers should stop exploiting their workers' weak bargaining position.

He said the common practice was "unethical and against the Pancasila industrial relations.

"It is the companies' right to disagree, but they should abide by the new ministerial decree on minimum wages to help create industrial harmony in the country."

Bomer argued that the 10.63 percent wage increase did not significantly contribute to a worker's real income because of the recent increase in transportation fares.

"The average Rp 315 increase in their daily wage will be absorbed by the Rp 200 to Rp 400 increase in bus fares," he said. (rms)