Minimum wages will increase by 16%
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)