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.