New minimum wage effective on Feb. 1

JAKARTA (JP): The new monthly minimum wage in the capital will take effect on Feb. 1 after a one-month delay, a top official said on Friday.

Deputy Governor for Social Affairs Djailani said the postponement was needed to give the city administration enough time to promote the new minimum salary to both employers and workers.

The city authorities set the new minimum wage of Rp 426,250 (about US$44.86) through the City Bylaw No. 3726/2000 last December. The amount was 24 percent higher than that in 2000.

"The increase is based on the minimum daily needs, economic growth, inflation rate and consumer price index, and particularly the ability of each company to comply with the ruling," said Djailani.

As a consequence of regional autonomy, which took effect on Jan. 1, the monthly minimum wage in a province is determined by the local tripartite wage committee and approved by the governor.

In the past the central government held the privilege to decide the minimum wage.

The Jakarta administration had raised the monthly wage from Rp 286,000 to Rp 344,257 in September before the second hike was decided three months later.

However, the latest increase is still below the Central Statistics Bureau (BPS) estimate of minimum daily needs of Rp 440,000.

"We must consider the average capacity of most companies in the capital," Djailani said in response to the BPS calculation.

During the year 2000, thousands of workers across the capital staged rallies demanding the government set their monthly minimum wages based on BPS estimate of minimum daily needs.

When the central government approved the monthly minimum wage of Rp 286,000 for 2000 last April, BPS data revealed the minimum daily needs were estimated at Rp 344,257.

When asked about possible violations of the regulation, Djailani said that any company which could not meet the regulation should request the city administration for a delay.

"The company also needs to negotiate the issue with the labor union for a thorough solution," Djailani said. (07)