Minimum wages will increase by 16%
JAKARTA (JP): The government announced on Thursday an increase in monthly regional minimum wages by an average of 16.7 percent.
Higher increases will also be set in different sectors and subsectors, especially those less affected by the economic crisis. The measure will go into effect on April 1, according to Director General for Industrial Relations and Labor Standards Syaufii Syamsuddin.
He said the policy was intended to arrest the decline in real wages caused by the economic hardship.
"The purchasing power of the workers continues to weaken and the labor situation will further decline if such a decision is not made."
The government made the decision after considering both economic and noneconomic factors, he said, citing consultation with governors, various ministries, the Association of Indonesian Employers (Apindo) and the Federation of All Indonesian Workers Union (SPSI).
"So, it is a joint decision and everyone involved has a common responsibility to safeguard it."
He expressed hope the wage increase would not draw protests and criticism from employers.
In Greater Jakarta encompassing Jakarta, Bogor, Bekasi and Tangerang, the nominal monthly minimum wage will increase to Rp 231,000 (US$26.25) from Rp 198,000.
The monthly minimum wage level in the industrial designated zone of Batam in Riau province, including islands under the Batam Development Authority, will be raised to Rp 290,000 from Rp 270,000.
Batam has the highest minimum wage level due to its highest living costs; Yogyakarta retains the lowest minimum wage level of Rp 130,000 a month.
Syaufii said the increases would still leave the average minimum wage across the country far lower than the minimum physical requirements because of the economic crisis.
"The minimum wages will fall to 70 percent of the minimum physical requirement from 75.8 percent last October."
He said minimum physical requirements were calculated on the basis of daily energy intake of 3,000 calories for a single worker.
Syaufii explained that sectoral and subsectoral minimum wages would be set in 19 provinces because many companies in particular sectors and subsectors were able to pay their workers more.
He cited firms in the plantations, mining, food and beverage, manufacturing and forestry sectors which were relatively unscathed by the crisis. They were considered to be able to pay their workers higher than the minimum wage level.
Minimum sectoral and subsectoral minimum wages will be between 0.73 percent and 33.6 percent higher than regional minimum ones.
For instance, two sectors -- farming, forestry, hunting and fishery, and the manufacturing -- have been chosen in North Sumatra.
The monthly minimum wage in the former sector is set at Rp 252,000 a month while that in the fish freezing sector is Rp 252,000, soft drink subsector Rp 221,000 and liquor industry subsector Rp 252,000.
Riau has chosen only the manufacturing sector. The minimum wage in the pulp, paper and rayon industry subsector will be Rp 255,000 a month.
Syaufii said minimum sectoral and subsectoral wages in eight provinces -- Jakarta, West Java, Bali, Lampung, Central Java, South Kalimantan, Central Sulawesi and East Timor -- were pending the submission of their proposals to the central government.
Meanwhile, FSPSI chairman Datuk Bagindo criticized the government for raising minimum wages without consulting the labor union at the national level.
"Only FSPSI and Apindo branches in provinces were involved in negotiations on the wage increases."
He said his organization proposed an increase by about 35 percent, citing soaring inflation of about 75 percent last year and 3 percent over the last two months.
Apindo secretary-general Purbadi Hardjo Prayitno described the increase as reasonable and in accordance with the organization's proposal. (rms)