New 7% wage hike falls short of basic needs

Damar Harsanto, The Jakarta Post, Jakarta

Labor unions said on Wednesday the 7 percent increase in the Jakarta minimum wage recommended by a tripartite wage committee would not be enough to cover workers' spending on their basic needs.

"The 7 percent increase still falls short of the minimum spending required by workers in Jakarta. It only covers at maximum 60 percent of the total actual spending (of the workers)," said Setiyono, chairman of the Greater Jakarta Labor Union (SBJ).

Citing a wage survey in August by the Wage Research Council, grouping representatives of employers, workers and scholars, Setiyono said the monthly minimum spending of workers in Jakarta ranged between Rp 850,000 and Rp 1,050,000, far above the proposed new minimum wage of Rp 631,000 for 2003.

"It simply means that the quality of life of workers will get worse despite the increase," said Setiyono.

The 28-member tripartite committee, consisting of representatives from labor unions, employers and the Jakarta Manpower Agency, recommended increasing Jakarta's 2003 minimum wage by about 7 percent from Rp 591,000 to Rp 631,000 per month.

Despite the dissatisfaction with the increase, Setiyono said that given the sluggish business climate and the numerous layoffs, workers were in a bad position to demand more money.

The tug-of-war between employers and workers over the wage increase turned heated after the Jakarta chapter of the Indonesian Employers Association (Apindo) said it would not accept any increase in the 2003 minimum wage. The worker unions, meanwhile, were demanding a 24 percent increase.

Masrana, secretary-general of the Jakarta Apindo chapter and a member of the tripartite wage committee, admitted the compromise figure of a 7 percent increase was unlikely to satisfy either employers or workers.

"However, that was the best the committee could do in satisfying both interests for the sake of business," said Masrana.

He said some employers could be exempted from the new minimum wage ruling, provided they met set standards such as financial accountability and consensus with their respective worker unions.

Masrana also said the Jakarta's inflation rate was among the factors in deciding the new minimum wage.

Jakarta's inflation rate stood at 11.52 percent last year, slightly below the nationwide rate of 12.55 percent. Inflation hovered at 10.29 percent in Jakarta in 2000, as compared to 9.35 percent nationwide. The government has predicted inflation will reach 8 percent next year, as compared to an expected 9.5 percent this year.

Meanwhile, Jakarta Governor Sutiyoso has signaled that he will approve the planned increase in the 2003 minimum wage. "Principally I agreed with the recommendation (of the committee). The increase should not be more than 10 percent," Sutiyoso said at City Hall.

He promised not to sign the decree on the new minimum wage before discussing it with worker unions and employers.

"The recommendation is already on my desk, but I will invite workers and businessmen to discuss it first," Sutiyoso said.