Sutiyoso approves new minimum wage increase

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.