Minister urges standardized remuneration system

Minister urges standardized remuneration system

The Jakarta Post, Jakarta

Minister of Manpower and Transmigration Jacob Nuwa Wea criticized the widening wage gap between workers employed in the private sector and those in the public sector and between locals and expatriates, saying a nationally-standardized remuneration system should be establishd to eradicate such disparity.

Speaking to reporters during a visit to Bengkulu on Monday, the minister said the ratio of wages in the public and private sectors averaged about 1:50 while the ratio of wages between locals and expatriates could be 1:100.

Many low-income civil servants and security personnel have had to do other jobs outside their work place to obtain additional income because their monthly salaries were not adequate to cover their spending habits.

"The unfortunate thing is that many civil servants are still being paid below the minimum wage. That is why I am fighting to put forth a national standardized remuneration system," Antara news agency quoted him as saying.

Nuwa Wea claimed that the high salaries of expatriate workers here had also raised envy among local workers.

He cited for example that with equal capability, an Indonesian citizen who graduated from the Bandung Institute of Technology was paid only Rp 6 million per month while expatriates with the same competence and skills were paid around Rp 60 million.

"This is a humiliation...," he added.

The minister also criticized the unfair remuneration system of large companies, saying the gross month salaries appeared very high but the basic salary was very low.

"Many employers have given many allowances to give the impression that their workers are paid high but it is the employers' trick to pay less taxes and insurance premiums for their workers," he said.

Nuwa Wea said further that a fair remuneration system was still being enjoyed by certain professions such as legislators and high echelons.

Jacob said a new standardized remuneration system for workers in private firms, civil servants, police and military officers should be regulated in a law.

"We need support to set a new system of remuneration," he said.

The minister also called on the education sector to improve the quality of their graduates and workers to undergo training programs to improve their skills in order to be able to compete with expatriates.

"We should also concede that certain sectors are still being dominated by foreign workers," he added.

Nuwa Wea, also the chairman of the Confederation of All Indonesian Workers Union (KSPSI), said that the labor union would put forth a new proposal to the government to exempt workers with monthly salaries of up to Rp 750,000 from income tax.

So far, the government has freed workers with monthly income of up to Rp 630,000 from income tax.

"With the current tax exemption, the government gives a little bit of happiness to workers, but we want workers to be happier by expanding tax exemptions to the monthly salary of up to Rp 750,000," he said.

According to him, the current tax exemption had been in effect since early this year following strong protests against the utility prices hikes in January.