Sutiyoso approves new minimum wage increase
Damar Harsanto, The Jakarta Post, Jakarta
After lengthy debate, Governor Sutiyoso made official on Friday a 6 percent rise in the city minimum wage to Rp 711,843 from the current Rp 671,550. The new wage will take effect in January 2005.
The latest decision was made after Minister of Manpower Fahmi Idris directly intervened in the protracted dispute between employers associations and labor unions during a meeting earlier in the day.
"All concerned parties have acknowledged that they understand all the considerations taken in arriving at the final figure of Rp 711,843," Sutiyoso told reporters at City Hall after the meeting.
However, a union representative attending the meeting, Wajis A Mangkonna, claimed that they had been forced to accept the proposed figure amid strong pressure from the government and employers.
"Employers insisted that they would not tolerate any increase higher than the proposed figure and threatened that a higher increase may spell mass layoffs. On the other hand, the administration as well the government said that they would not tolerate any mass layoffs," he told The Jakarta Post.
The administration said earlier that the unemployment level in Jakarta had increased to 600,000 this year, from 500,000 last year.
Sutiyoso asked Fahmi to intervene after the employers associations and workers associations failed to reach a consensus in their meeting last week. Fahmi declined to talk to the press after the meeting.
In a vote marred by a walkout by representatives of workers associations, the meeting concluded with a recommendation to Sutiyoso to approve the 6 percent hike.
However, the workers protested the proposed hike as the increase is well below the minimum cost of living in Jakarta, which is around Rp 759,953.
The calculation of the minimum cost of living was made based on a joint survey made by representatives of the administration, employers associations and workers associations at five municipalities in the city in July.
A circular sent by then manpower minister Jacob Nuwa Wea to governors countrywide on July 16, recommended that the new minimum wage should be the same or higher than the minimum cost of living in the respective provinces.
Separately, Jakarta Manpower and Transmigration Agency head Ali Zubeir said that the Friday meeting also came up with a plan to impose minimum wages in accordance with the respective job sectors instead of a single minimum wage for all kinds of companies.
"The automotive sector, for instance, will have a higher minimum wage as business is robust compared to the ailing textile industry," said Zubeir.
In the decree, the governor still gives the opportunity to companies to propose a delay in the implementation of the new minimum wage.
"They could submit a proposal to delay the implementation to the Jakarta Manpower and Transmigration Agency 10 days before Jan. 1 at the latest," it said.
An activist with the Indonesian workers association (Aspek Indonesia), Timbul Siregar expressed disappointment with the increase and threatened to hold a mass rally after the Idul Fitri holiday in order to press for their demand for a higher wage increase.