Minimum wages to rise as of April: Abdul Latief
Minimum wages to rise as of April: Abdul Latief
JAKARTA (JP): Minister of Manpower Abdul Latief announced
yesterday the government will raise wages by an average of ten
percent next April.
Speaking to reporters after a meeting with President Soeharto,
Latief said wage increases will be adjusted to be in line with
conditions of the minimum physical needs in each province
throughout the country.
"Provinces such as North Sumatra, Aceh and Batam, which have
been able to meet minimum needs, for example, will not be asked
to raise wages," the minister said.
Even though Batam, which is part of the Riau province, has a
high wage level, the minimum needs in the whole province have not
yet been fulfilled, he said.
He said the increases will be executed in Jakarta and Central
Java, whose wages account for 95 to 99 percent and 98 percent,
respectively, of minimum needs.
Wages in West, South, Central and East Kalimantan, as well as
South Sulawesi will also be raised but the increases will not be
as high.
He reiterated that the wage increases will not be applied in
provinces whose main revenues are generated from agricultural
commodities.
"Asking such provinces, like East Nusa Tenggara, to raise
wages is feared to burden the regions," he said.
President Soeharto has order the ministry of manpower to
coordinate the calculation of the increases be linked with the
provinces' industrial structures.
Latief said the country's industrial structures badly need
restructuring because raw materials in a number of them have
accounted for between 65 and 80 percent of total productions
costs.
"Under such structures, any increase in prices will
automatically hurt workers' wages, as labor costs will be reduced
to offset the raises," he said.
He expects a thorough study on the industries which apply such
unhealthy cost structures to be conducted soon.
Latief also said an inter-departmental meeting will be held in
the near future to discuss ways on how to improve the unhealthy
structures.
"We will also discuss ways to fight against the cheap labor
concept," he added. (hhr)