Tangerang will likely see 10% wage hike next year

Multa Fidrus, The Jakarta Post, Tangerang

While the Jakarta administration has decided to increase the minimum wage by 7 percent starting in January, Tangerang, whose current minimum wage is similar to Jakarta's, will likely implement a 10 percent increase in 2003.

A tripartite committee consisting of representatives from labor unions, employers and the Tangerang municipal manpower agency, agreed on Wednesday to issue a recommendation to the Tangerang mayor for an increase in the minimum wage of about 10 percent, from Rp 590,000 to Rp 649,000.

Independent labor activists agreed with the 10 percent increase, even though they said that if approved the new minimum wage would still not be enough on which to live.

Kasmina, chairwoman of the workers union at PT Hyun Indonesia Garment, said workers agreed not to ask for more money because they realized businesses were suffering from the sluggish economy and they wanted to avoid massive layoffs.

"We want the relationship between workers and businesses to be maintained, even though the workers are placed in a bad position whenever they ask for more money," she said.

Citing a wage survey conducted by the Federation of Karya Utama Labor Associations (FSBKU) between May and September 2002, Kasmina said the minimum monthly spending of workers in Tangerang ranged between Rp 800,000 and Rp 1,200,000, far above the proposed new minimum wage of Rp 649,000.

"If the Tangerang mayor approves the proposed 10 percent wage increase, the new wage will only cover 50 percent of the total actual spending of workers," Kasmina told The Jakarta Post.

Data from the Tangerang Manpower Agency shows that eight companies in the municipality went out of business in 2001 and 11 shut down this year.

Currently, there are 1,419 companies in the Tangerang municipality.

Yusuf Makatita, chairman of the Tangerang branch of the Indonesian Workers Association (SPSI), said the proposed 10 percent wage increase was based on a recent statistical survey that predicted inflation here would reach 9.5 percent this year.

Helmi, of the Tangerang branch of the Indonesian Employers Association (Apindo), told the Post that employers agreed to a wage increase that used the Jakarta minimum wage as a reference point.

Meanwhile, the Tangerang municipal manpower agency chief, Adang Turwana, said Mayor M. Thmarin would likely approve the proposed 10 percent increase in the 2003 minimum wage.

He said the minimum living expenses (KHM) in Tangerang was the main factor in deciding the new minimum wage. There were five other factors considered in the decision: the price index, the health of local companies, minimum wage in Tangerang's surrounding areas, the condition of the job market and overall economic progress.

He said a joint survey by the tripartite committee on the price of 43 basic goods at three markets in Tangerang between May and October 2002, concluded that the KHM in Tangerang was Rp 614,504.

"If Mayor M. Thmarin is willing to approve a new wage above Rp 614,504, it means that the mayor has the political will to improve the welfare of workers," he told the Post.

Separately, Hamdani Malik, chief of industrial relations at the manpower agency in Tangerang regency, said his office would hold a tripartite committee meeting involving employers and labor unions to discuss the regency's 2003 minimum wage on Monday.

"But the wage hike in the regency will not be far different from the newly approved Jakarta minimum wage," he said.

There are 2,363 companies operating in the regency. Last year, three companies reported the closure of their businesses to the agency, while so far this year that number is four.