Sudden wage increase

Although the government is implementing an austere state budget, it has suddenly raised civil servants' salaries by approximately 15 percent, as of yesterday.

However, the good news for the four million civil servants was not announced in advance in the House of Representatives. Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita, who made the announcement to a small group of journalists, did not give any reasons for not doing that. Perhaps the authorities wanted to avoid the traditional psychological impact of the wage increases on the market.

Traditionally, the market has always reacted negatively to any salary increases by increasing prices of basic needs although retailers understand that civil servants' pay is still very low.

The increases for each rank are not yet available to the media but usually the lowest ranks get the biggest increases. Neither have we received a reason for the sudden hike.

In the past the government has always been reluctant to increase civil servants' salaries for economic reasons. That is the reason why this group of employees has been called the lasting victims of the contemporary situation or the most patient Indonesians to date.

Before the new increase took affect, the basic monthly salary of a newly appointed civil servant of the lowest grade was Rp 138,000 (US$17). A newly recruited university graduate got Rp 241,800. An employee of the highest grade (IV) with 32 years of service received Rp 722,500 ($90).

All civil servants also get a 10 percent spouse allowance and a maximum 6 percent children's allowance and their salaries are subject to a 25 percent deduction for tax and pension.

Some people might ask, considering that the pay is so low, why so many people still want to be civil servants even if they have to pay bribes to get the job? The answer is the acute lack of job opportunities elsewhere. And for some the bribe they pay will be automatically refunded if they get a post in a sector of the public service where illicit business has become common due to the poor levels of supervision.

Another question is why the government has decided to increase public sector salaries and rejected hiking the minimum wages for private sector workers? The consideration may be a sense of sympathy for the civil servants who, in this devastating economic crisis during which prices of many basic needs increase every day, can hardly keep their noses above water.

Their situation will become worse after the government increases fuel prices this month and electricity tariffs in early June. Another possibility is that the authorities feel the need to calm down their employees as part of their efforts to defuse the crisis-sparked social time bomb, even though it means they might have to print more money than they have gold reserves to cover it.