Not the right time to lift minimum wage: Employers

JAKARTA (JP): Both employers and workers gave cautious comments Saturday over whether the minimum wage in the city should be increased to allow for rising prices.

Djafar Tirtosentono, chairman of Pulau Seribu Marine Tourism Association, told The Jakarta Post that it was hard even to stay alive in tourism these days due to the current monetary crisis.

"Imagine this. Every year, especially in peak holiday seasons like this, our cottages are always booked out. But right now, we have only 10 percent of the visitors than usual. This time is our lowest season. So, we can't possibly give raises," Djafar said.

Djafar made the remarks when asked to comment on the municipality's proposal to increase the minimum wage. Based on the municipality's proposal, the existing wage should be increased by 13 percent to meet basic living expenses.

"Basically I agree with the proposal, but I don't think this is the right time to announce an increase. It's just impossible to do that because we have to strive just to keep our businesses alive."

Most businesses, including those in tourism, have been severely hit by the monetary crisis, he said.

"Since last October, many vacation reservations have been canceled."

Holiday packages, which are quoted in U.S. dollars, have more than doubled in cost. For instance, if a holiday package was only US$3,500 a few months ago, it would now be $6,750 because falling occupancy rates has sparked increases in holiday packages to cover operational costs. Eventually, only a few people go on vacation, he said.

Besides the currency crisis, tourism has experienced a slow period due to the haze in Indonesian skies, he said.

"Tourists, especially foreigners, are afraid to come here because of the haze issue. All of these things worsen the situation. Therefore, what we can do now is look after our business so there won't be any workers' dismissals," Djafar said.

"Wait until at least six months from now. If the economic condition improves, then we can talk about a wage hike."

The Rp 172,500 ($33.17) monthly minimum wage in Jakarta covers only 96 percent of basic needs.

Based on the municipality's calculations, a 13 percent increase would meet basic living expenses.

The calculations take into account the cost of food and drink, housing and related items, clothing and various needs such as transportation, recreation, medicine and education.

Meanwhile, Ferdinand M.J., director of a food producer, said that even though it was a festive season, it was hard to consider increasing wages.

"No business in the city is unaffected by the monetary crisis. So I don't think we can afford a raise. Moreover, my company has just dismissed some 100 workers.

"It's not that we don't want to give our workers better prosperity. We are really in a jam here," Ferdinand said.

When asked about the ideal minimum wage for workers, he said that if it could, the company would triple wages.

"But we have to be realistic. Not all companies in Jakarta have the ability to provide a 13 percent raise," he said.

Some workers expressed their hopes and fears regarding a wage increase.

Suprapto, a technical worker at a large factory in West Jakarta, said he was happy with the proposal.

"I hope the municipality can realize the proposal. It's so hard for us to fulfill our families' daily needs because food prices have crept up these days," he said.

He hoped an increase in the minimum wage would not be followed by increased prices of goods.

Andy W. Subarkah, a worker in tourism, said he would rather keep his job with a small salary. "I know it's impossible for us to get a raise now. It's better this way than to have a big raise but having other workers fired." (edt)