Minimum wage raised by 10%
Minimum wage raised by 10%
JAKARTA (JP): Minister of Manpower Abdul Latief announced yesterday the new minimum wage levels for 25 of Indonesia's 27 provinces, showing increases averaging 10.63 percent, with implementation starting in April.
Latief told journalists in his office that the increase was "the most that we could ask for" given the present outlook of the Indonesian economy.
Stressing that the government is concerned about improving workers' welfare, he said "we have to take into account other factors, especially the nation's economic prospects, so that minimum wage increases will not disrupt our economic growth."
The increase is higher than the 8.6 percent inflation Indonesia registered in 1995, but the new wage levels in most provinces are still 93 percent of what the government considered the minimum level required for subsistence, which is the equivalent of the cost of a 3,000 calorie intake a day.
Latief said the minimum wages should reach the minimum subsistence level by April 1998 at the latest.
The average increase is also the lowest in the last four years. In 1993, the government hiked the minimum wages by an average of 17.76 percent, in 1994 by nearly 30 percent, and last year by an average of 18.6 percent.
Under the new increases, the daily minimum wage for the greater Jakarta area will be Rp 5,200 ($2.26) compared to Rp 4,600 at present, while in Surabaya, Indonesia's second largest city, the new wage level is Rp 4,000, up from Rp 3,700. The minimum wage level for Batam, the highest in the country, will be increased to Rp 7,350 from Rp 6,750. The new minimum wage for East Nusa Tenggara and North Sulawesi will be announced later.
The minimum wage levels are the result of deliberations involving representatives of employers, workers and the local administration in each province. But the minister has the final say in every decision.
Latief turned down a proposal forwarded last week by a council representing workers, employers and the government, that the minimum wages represent solely basic pay, excluding allowances.
In a new decree announced yesterday, the minister ruled that the minimum wages include basic wages and "fixed allowances", which are defined as those not related to the presence or productivity of the workers.
Latief, a former businessman, explained that the government could not meet the council's proposal at this time because "it would be a burden for some companies."
The question of whether or not minimum wages should include allowances has been one of the main sources of conflict between workers and management in recent years.
Latief said companies that have already been paying their workers above the minimum wage levels should not attempt to reduce them.
The new decree allows companies to apply for exemptions, for a period of up to 12 months, from the new minimum wage levels if they cannot afford it. But this will require subjecting their finances to official scrutiny.
He appealed to workers not to resort to strikes in pressing their demands, unless as a last resort when negotiations failed to resolve the conflict.
Last year, according to the minister, saw 297 workers' strikes in Indonesia, one more than in 1994. Sixty five percent of the strikes were over wages.
The number of industrial actions in Indonesia is expected to hover between 200 and 250 a year, in part because employers are still depriving workers of their basic rights, and in part because workers are becoming more demanding.
Latief reaffirmed his ministry's motto "our heart and thoughts go to workers and job seekers" adopted since last year, and will continue to be used in 1996."To be fair, we've already seen the result of this motto, although we have to admit that there were weaknesses and obstacles in our work," he said. (03)