Set minimum wages fairly: Minister
Ridwan Max Sijabat, The Jakarta Post
Minister of Manpower and Transmigration Erman Suparno has called on his regional counterparts to remain neutral in negotiations with employers and workers in setting regional minimum wages.
Partiality could otherwise spark industrial conflicts and disrupt political stability in the regions, he said.
"Governors and regents/mayors must play their roles as skilled negotiators to narrow the widening demands between employers and workers. They must be able to seek win-win solutions in tripartite negotiations to set a fair minimum wage," he told The Jakarta Post here on Wednesday.
The central government no longer has the authority to interfere in minimum wage determinations due to regional autonomy laws.
But Erman reminded regional administration heads that failure to address the issue would ignite industrial conflict between workers and their employers and in turn raise security concerns.
He was referring to massive labor rallies in North Sumatra, West Java, Banten and East Java over minimum wage levels that workers deemed as too low.
"It is very important that regional government leaders are open to all aspirations, that employers understand their workers' daily needs, and that workers or labor unions understand the financial situation of companies where they are employed," he said.
Erman said he was monitoring the tripartite negotiations in provinces, regencies and mayoralties across the country.
So far, 23 of 33 provinces have set their minimum monthly wage for the 2006 fiscal year with an increase of between 9.6 percent and 36 percent.
According to Ministerial Decree No. 1/1999, decrees on minimum wages are issued two months or 60 days before they come into effect on Jan. 1.
Jakarta has raised the minimum wage by 15 percent to Rp 819,100 (US$83) from the current Rp 711,843, while North Sumatra will see a 23 percent increase to Rp 737,794 from the current Rp 600,000.
The highest increase of 36 percent will apply in Riau Islands province, where workers will receive Rp 760,000 compared to the current level of Rp 557,000.
The size of the increases are normally determined in accordance with the inflation rate of the previous year.
Asked about the planned mass dismissals at Bank Danamon and PT Indofood Sukses Makmur, the minister said the two companies had complied with the law.
"I have summoned the management of the two companies to check the reasons behind their decision. So far, I see no problems. They decided to cut some of their employees in a bid to diversify their businesses. The problem is that employees from closed units do not meet the job competencies needed for the new units," he said.
Indofood, Indonesia's largest instant noodle producer, has proposed to dismiss at least 4,000 of its 50,000 workers, while publicly listed PT Bank Danamon plans to dismiss 450 workers from the their soft-loan credit unit, which would be closed down.
Provincial minimum wages in 2006
Province % increase 2005 2006
Aceh 21 Rp 620,000 Rp 750,000
North Sumatra 23 Rp 600,000 Rp 737,794
Riau 15 Rp 551,500 Rp 637,000
Riau Islands 36 Rp 557,000 Rp 760,000
Jambi 16 Rp 485,000 Rp 563,000 South Sumatra 20 Rp 503,700 Rp 604,000
Bangka-Belitung 14 Rp 560,000 Rp 640,000
Bengkulu 20 Rp 430,000 Rp 516,000
West Java 9.6 Rp 408,260 Rp 447,654
Jakarta 15 Rp 711,843 Rp 819,100
Banten 13 Rp 585,000 Rp 661,613
West Java 15 Rp 390,000 Rp 450,000
Yogyakarta 15 Rp 400,000 Rp 460,000
East Java 15 Rp 340,000 Rp 390,000
Bali 14 Rp 447,500 Rp 510,000
W. Nusa Tenggara 16 Rp 475,000 Rp 550,000
E. Nusa Tenggara 22 Rp 450,000 Rp 550,000
West Kalimantan 15 Rp 445,200 Rp 512,000
South Kalimantan 17 Rp 536,300 Rp 629,000
East Kalimantan 14 Rp 600,000 Rp 684,000
Maluku 15 Rp 500,000 Rp 575,000
Southeast Sulawesi 15 Rp 498,600 Rp 573,400
South Sulawesi 20 Rp 510,000 Rp 612,000
Source: Ministry of Manpower and Transmigration