Minimum wage set to rise 15% to 55%

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)