N. Sumatra minimum wage up 36 percent

Apriadi Gunawan, The Jakarta Post, Medan

North Sumatra Governor T. Rizal Nurdin issued a decree on Monday increasing the monthly minimum wage by 36.27 percent to Rp 464,000 (US$46.4) for the 2002 fiscal year, up from the current Rp 340,500 ($34).

The increase was higher than that proposed by employers' representatives, but lower than that proposed by the labor side.

North Sumatra provincial administration spokesman Sakhyan said the increase stipulated by the governor was really a middle course that was designed to satisfy both workers and employers, who had earlier failed to reach an agreement on the issue.

"The governor's decree is expected to gain the support of both sides," he said at a press conference here on Monday.

Both the employers and labor unions representing workers in the province had handed the task of reaching a decision to the governor after both sides failed to reach a compromise.

Employers in the province had proposed the minimum wage be increased to Rp 453,000 while the labor unions held out for Rp 475,000.

Meanwhile, both employers and workers applauded the governor's decree, saying it satisfied both sides.

Muh. Yusuf Tambunan, chairman of the local chapter of the Indonesian Muslim Workers Union (PPMI), said his organization supported the governor's decree and would disseminate it among its members in the province.

Chaidir Ritonga, an executive of the local chapter of the Indonesian Chamber of Commerce and Industry (Kadin), said the governor's decree was quite accommodative.

"The increase of 36 percent in the minimum wage is in line with the central government's desire to make the minimum wage sufficient to meet minimum physical needs," he said.

The increase is the second highest in the country after East Kalimantan hiked its minimum wage by 66 percent to Rp 500,000 from the current Rp 300,000.

Six other provinces have already set their respective minimum wages, while more than 23 others have yet to do so, mostly due to the absence of agreement between workers and employers representatives.

The six provinces are Jakarta, West Java, Jambi, Central and Southeast Sulawesi and East Kalimantan.