Mixed reactions greets minimum wage decision

Mixed reactions greets minimum wage decision

JAKARTA (JP): Union leaders said yesterday the government's
planned 10 percent increase in the minimum wage level was not
sufficient, while the chairman of the Chamber of Commerce and
Industry urged all members to comply.

The increase was not satisfactory because it did not guarantee
workers decent living conditions, Atika Karwa, deputy chairman of
the Federation of the All Indonesian Workers Union (FSPSI), told
Antara.

The use of the minimum physical requirement as a reference in
setting the minimum wage was inappropriate, Atika said, pointing
out it was calculated based on wholesale prices and not on the
retail prices workers pay.

The ideal minimum wage for a worker was Rp 10,000 a day, based
on the needs of a worker and his or her family, he said. "It will
take a serious effort by the government to improve the welfare of
workers," he added.

FSPSI had officially asked for a 16 percent increase in the
minimum wage, though some unions under the federation had called
for an increase of up to 20 percent in major industrial centers
like Jakarta and Surabaya.

The Indonesian Prosperous Labor Union (SBSI), not recognized
by the government, denounced the 10 percent hike.

"This is way below expectations," SBSI deputy chairman Tohap
Simanungkalit told The Jakarta Post.

"What kind of quality do you expect from workers whose
earnings provide only 90 percent of the minimum physical
requirement?" he asked.

He also set Rp 10,000 per day as an ideal, a minimum wage
level which would encourage workers to improve their skills.

"This is not impossible, if the government has the will," he
said.

Tohap said an SBSI study found, on average, labor made up 9
percent of total production costs. The biggest component,
amounting to 40 percent, is what business called "invisible
costs", he said.

Another SPSI executive, Wilhelmus Bokha, told Antara various
business levies by the government, including many illegal ones,
were at the root of Indonesia's "high-cost economy".

Many companies had demanded these invisible costs be
eliminated so they could pay workers more, Bokha said.

He warned the low wages paid to workers could threaten
production. "Workers who earn low wages are vulnerable to
agitation and calls for demonstrations," he said.

Aburizal Bakrie, chairman of the Chamber of Commerce and
Industry, said he hoped all companies could comply with the new
minimum wage policy.

Aburizal however rejected the suggestion by some business
associations that minimum wage levels should be based on sectors
rather than regions.

"It's impossible for us to set different minimum wage levels
for steel workers and textile workers. We can only set them by
regions," he said.

He said increases in minimum wages should be linked with
workers' productivity. "If productivity does not increase, then
employers have to make trade-off (in costs) elsewhere," he said
without elaborating. (08/jsk/emb)