Talks on minimum wages hit snag

Talks on minimum wages hit snag

Damar Harsanto, The Jakarta Post/Jakarta

What do people survive on a monthly wage of only Rp 671,550
(US$73.80) in Jakarta? It may be difficult for white-collar
workers to answer but that is what some of their blue-collar
counterparts have to get by on.

However, a recent survey of basic commodity prices in
traditional markets by the Indonesian Federation of Metal
Industry Unions (FSPMI) found that a worker needs at least Rp
968,134 per month to survive.

"The minimum cost of living allowance is usually 15 percent
higher than the basic needs cost, or Rp 1,113,354," the union
said in a statement.

Therefore, the workers are demanding higher salaries of around
Rp 1.2 million.

However, the negotiations between the workers' unions and the
employers association have failed to reach agreement on the
amount of the provincial minimum wage for next year.

"The talks have been very tough as neither the employers nor
the workers are willing to submit to the other side's demands,"
the assistant to the city secretary for people's welfare, Rohana
Manggala, told The Jakarta Post on Sunday.

She added that the employers would only agree to a 7 percent
increase in the current minimum wage, which was previously raised
by 6.3 percent from Rp 631,000.

Indonesian Employers Association chairman Sofjan Wanandi said
that the employers hoped the raise would not exceed the rate of
inflation in Jakarta, which is predicted to come in at around 6.5
percent this year.

"We are behind schedule as the talks should have finished last
Friday. The employers will not be able to meet the workers'
demand. It would still be too high even if they lowered their
demand to Rp 1 million. If Monday's negotiations end in deadlock,
we will have to have a vote," he told the Post.

A total of 21 representatives of employers, workers and
Jakarta administration officials sit on the provincial wages
council.

Bylaw No. 6/2004 on manpower provides that the council submits
a recommendation to the Jakarta governor on the size of the
minimum wage hike. The increase is based on the council's
analysis of the prices of 43 basic commodities.

Jakarta Manpower Agency director Ali Zubeir said the increase
that is agreed upon must take into account the interests of all
those involved.

"We must accommodate the interests of the workers and
employers so that both can survive," he said, adding that an
increase that was greater than the ability of companies to pay
would only backfire in the end.

"We must ensure that companies survive and provide
employment."

Agency data shows that around 25,000 private firms operate in
the city and employ around four million people. The data also
shows that open unemployment in Jakarta is around 589,700.