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)