New grads get caught out by low Jakarta salaries

New grads get caught out by low Jakarta salaries

Zakki P. Hakim, The Jakarta Post, Jakarta

Dewi was among the top graduates from Gadjah Mada University,
Indonesia's most prestigious located in Yogyakarta.

With her fluent English, almost perfect straight-A grades from
the Faculty of Economics, and an outstanding extra-curricular
record, it took her virtually no time to get a "managerial level"
job in one of the big five consulting and accounting firms in
Jakarta.

However, she quickly realized that she had made a mistake in
accepting the basic monthly salary of Rp 1.5 million (US$154), a
figure she later said was simply insufficient to cover her living
costs in Jakarta.

Because she had lived in Yogyakarta all her life, she
initially thought that the offered salary was adequate.
Fortunately, she plucked up the courage to go back to her
employer and tell him the problem.

"I presented my projected costs of living in Jakarta, which
included meals, house rent and transportation. And I told him,
how can I focus on doing my job here, if all I can think about
are ways of getting additional income to cover my living costs,"
she told The Jakarta Post.

Her boss accepted the argument and raised her monthly basic
salary to Rp 2.5 million, plus other benefits such as healthcare
allowances and insurance. This story took place in 2000.

Dewi's story is a typical of what top fresh graduates from
cities outside of Jakarta experience when they come here to work.

A recent survey by New York-based consulting firm Mercer Human
Resource Consulting provides an explanation about why Yogyakarta
graduates coming to work in Jakarta or other big cities
experience such confusion.

According to the survey, living costs in Yogyakarta are the
lowest among the 22 cities in 19 provinces surveyed last April,
while Jakarta is the fourth most expensive city after Jayapura,
Batam and Balikpapan.

Mercer Indonesia's performance, measurement and rewards
business leader Luky Suardi said that Jakarta was used as the
comparative benchmark with an index of 100. On this scale,
Jayapura's score is 104 while Yogyakarta's is 82, meaning that
living costs in Yogyakarta are about 82 percent of Jakarta's.

Luky explained that living costs were measured by surveying
150 goods and services, including such things as rice,
cigarettes, consumer electronics, clothing, domestic helpers,
utilities, commuting costs, sports and leisure.

According to the survey, factors that determine the cost
discrepancy between cities were all related to transportation and
distribution problems. The more access a city has to goods --
especially food -- and services, the lower its cost of living
would became.

Bandung, for example, took 17th position because it was
surrounded by food producing areas and thus enjoys less expensive
food prices compared to other cities. In addition, the city was
not too big meaning commuting to work was also less expensive.

Conversely, Jayapura had the highest living costs because of
its geographic remoteness from sources of goods and services.

In addition to the Indonesian survey, Mercer also compared
living costs in cities globally, where Jakarta took the 71st
place, way above Kuala Lumpur, Bangkok and Manila that were
ranked 117th, 125th and 143rd respectively.

Jakarta's position this year represents a drop from the
previous year's position of 45. Luky explained that Jakarta's
cost of living dropped due to the weakening rupiah.

The global survey by Mercer covers 144 cities and is based on
consumption behavior of expatriates. Topping the list were Tokyo,
followed by Osaka, London, Moscow and Seoul, while New York was
ranked 13th.

Luky explained that the survey aimed at assisting companies in
setting fair compensation packages for their expatriated
employees.

However, the survey on living costs in Indonesian cities
should also be useful for Indonesian job seekers in bargaining
for fair remuneration.

But not for Dewi. She has now married, had a child, given up
her career and lives with her family in the United States. Her
husband and Dewi could now use the global survey instead.

City ranking based on cost of living, 2005
1. Jayapura 12. Semarang
2. Batam 13. Padang
3. Balikpapan 14. Makassar
4. Jakarta 15. Palembang
5. Medan 16. Pekanbaru
6. Banjarmasin 17. Bandung
7. Bogor 18. Denpasar
8. Manado 19. Mataram
9. Surabaya 20. Cilegon
10. Tangerang 21. Bandarlampung
11. Bekasi 22. Yogyakarta

Source: Mercer HR Consulting