Minimum wage set to rise 15% to 55%

JAKARTA (JP): Official minimum wage levels throughout the country will increase between 15 percent and 55 percent from April 1, the Ministry of Manpower announced on Monday.

Although representing significant increases, the new minimum wages for most regions barely cover the monthly living expenses of a single person, the ministry said.

The hike in the regional minimum wage levels was the result of negotiations involving labor representatives, employers and local government officials.

The Ministry of Manpower gave its approval to their recommendations.

Aceh will receive the highest raise of 55 percent, taking its monthly minimum wage level to Rp 265,000 (US$35), while Bali will experience the lowest increase (14.60 percent).

Workers in the industrial zone of Batam continue to enjoy the highest minimum wage, at Rp 350,000 ($47) a month, while Jambi and Bengkulu replace Yogyakarta from April with the lowest minimum wage of Rp 173,000.

The level in Jakarta increased 23.81 percent to Rp 286,000 ($38).

The ministry did not release new minimum wage levels for Maluku or newly created North Maluku province because they have yet to submit their proposals. Both provinces have been racked by communal violence during the past year.

The director general of industrial relations and labor standards, Syaufi'i Syamsuddin, said all decisions in the enforcement of the wage levels would be left to regional administrations.

Companies may apply for exemption from the ruling by opening their finances to inspection by government officials and unions. Such decisions were taken at the national level in the past, but beginning this year they will be decided at the regional level as part of the government's move to give greater autonomy.

Syaufi'i said the minimum wages were the lowest acceptable level for worker subsistence.

"They are for a single worker with zero work experience," he said, adding that employers should strive to provide higher pay.

He conceded that purchasing power was slashed by the economic crisis of the last three years. Although inflation rose only 2 percent in 1999, it jumped 78 percent in 1998.

The significant increase in minimum wage levels this year should bring some of the wages closer to the estimated levels of minimum living requirements, or the subsistence level, in each of the regions.

Syaufi'i said the government would strive to ensure minimum wages were at least at the subsistence level as soon as possible.

Given the costs of living in each region, only on onshore Riau and East Java Region II would the minimum wages cover the minimum subsistence level beginning in April.

The minimum wage level in Jakarta, where the cost of living is one of the highest in the country, covers only 81.42 percent of the estimated subsistence level.

Syaufi'i appealed to workers to accept the increases, saying they resulted from negotiations in which their representatives were involved.

Labor unions threatened to call for strikes, some even planning a nationwide strike, if the increases were below expectations.

The chairman of the All-Indonesia Workers Union Federation (FSPSI), Jacob Nuwa Wea, said the increases were still too small.

"We will go ahead with our plan to call for a nationwide strike. We are talking with other unions to come to a common response to the new regional minimum wages," Jacob told The Jakarta Post.

The Indonesian Employers Association (Apindo) said it supported the minimum wage increases and hoped companies would comply with the regulation.

Although recognizing unions' concerns that wages were insufficient to cover living expenses, Apindo deputy secretary Djimanto said unions should be realistic in pressing their demands and take into account prevailing domestic economic conditions.

"They have the right to strike, but they should know that their actions will affect not only employers, but the government, the national economy and, ultimately, the workers themselves and their families."

He urged major corporations to pay their workers above the minimum wage to motivate them to improve productivity.

He said employers would be able to pay even higher wages if the government succeeded in eliminating the corruption at the root of the high-cost economy. (rms)