Monthly minimum wage to rise by 30 percent in eight provinces

Monthly minimum wage to rise by 30 percent in eight provinces

JAKARTA (JP): The official monthly minimum wage levels in
eight provinces will rise by an average of about 30 percent as of
Jan. 1, 2001.

Syaufi'i Syamsuddin, director general for industrial relations
and labor standards at the manpower and transmigration ministry,
told The Jakarta Post here on Monday that Aceh, Riau, East
Kalimantan, North Sumatra, Central Sulawesi, East and West Nusa
Tenggara and the Riau archipelago were the eight provinces in
which increases had been decided upon.

Increases in the other provinces are still being negotiated.

Syaufi'i said the increases of around 30 percent were based on
economic growth of 4 percent and double digit inflation in the
2000 fiscal year.

"Despite the increases, minimum wages have yet to reach the
levels where they can satisfy minimum physical requirements,
except in Jakarta," he said.

In April the government raised minimum wage levels across the
country between 15 percent and 55 percent.

Syaufi'i added that the remaining provinces have also proposed
minimum wage increases of an average of 30 percent for the 2001
fiscal year but they have yet to be approved by the respective
governors.

He said the Jakarta tripartite wage committee had proposed an
increase in the monthly minimum wage to Rp 486,000 from the
current level of Rp 286,000 but that this has yet to be approved
by governor Sutyoso.

"And the minimum wage level in Jakarta's outlying areas --
Bekasi, Bogor and Tangerang-- is expected to be of the same order
as in the city because of the similar cost of living in these
areas," he said.

He insisted that the central government no longer had
authority in determining minimum wage levels because based on
Ministerial Decree No. 226 which was issued in September, the
monthly minimum wage should be determined by the governor
together with the provincial wages committee in line with the
implementation of regional autonomy next year.

However, he stressed that the remaining provinces should
announce increases in their minimum wages soon in order to
prevent workers from becoming restless.

"According to this decree and Ministerial Decree No. 394, the
provincial administrations should have announced their minimum
wage hikes on Nov. 2, two months before they take effect. And, we
will continue to encourage governors to announce the hikes by the
end of this month," he said.

Syaufi'i also reminded employers to pay annual bonuses in time
in line with the approaching Christmas and Idul Fitri holidays,
saying a postponement of the annual bonuses could lead to labor
strikes.

"Employers should be extra cautious in managing their finances
because the annual bonuses and the increases in the minimum wage
will become payable at almost the same time," he said.

When asked about the ongoing review of a Ministerial Decree on
higher severance and long-service payments, Syaufi'i said there
would no fundamental changes made to the decree and that it still
remains effective.

"Foreign investors' fears that with the decree workers will
rush to quit their jobs are groundless. Of the utmost importance
is that employers should not dismiss their employees arbitrarily
and that higher severance and long-service payments should be
considered as normal as the workers have contributed to the
companies where they are employed," he said.

President Abdurrahman Wahid has recently asked Manpower and
Transmigration Minister Al-Hilal Hamdi to review the decree which
he said has hampered foreign investment in Indonesia.

Syaufi'i said the foreign investors' objections to the decree
was more political than economical because so far, no worker has
quit their job just to gain the higher merit service payment.

"And foreign investors will not face financial difficulties to
pay higher merit service payment in accordance to the decree if
only a few of their workers resign," he said.

He added foreign investors should bear in mind that their
workers would not rush to quit their job as it is very difficult
to seek employment under the present situation. (rms)