Tough talks expected on minimum wage
Damar Harsanto, The Jakarta Post/Jakarta
The employers association and trade unions are likely to be locked in a tough tug-of-war over the city's minimum wage in 2006 as both sides are sticking firmly to their respective positions.
Labor activists stressed on Friday that they would demand a 20 percent increase in the minimum wage in Jakarta next year, while employers insisted that any salary increase should be below 10 percent.
"It seems that negotiations will be tough," the Jakarta branch of the Indonesian Employers Association (Apindo) secretary- general Masrana told The Jakarta Post on Friday.
He said that most enterprises here would find it difficult to meet workers' demands to raise the minimum wage by 20 percent as most of them were still struggling to weather the severe blow of the recent fuel price hike.
The government raised the price of premium fuel for industries to Rp 6,290 per liter from Rp 5,160 previously, while diesel fuel was raised from Rp 5,300 to Rp 6,000 and Rp 5,600 to Rp 6,400 per litter.
According to Masrana, the fuel price increase has caused the cost of production at some enterprises, especially manufacturing industries in the city, to soar by up to 15 percent.
"We fully understand that workers need a raise in their salaries to weather the pinch of the fuel prices. It is impossible not to raise the minimum wage at all. What we can tolerate is an increase below 10 percent at the highest," he asserted.
He said that rather than laying off workers, many employers would boost their efficiency and launch aggressive marketing drives to increase their sales to withstand the impact of the fuel price hike.
Timbul Siregar of the Indonesian Workers Association (Aspek) demanded on Friday that the new minimum wage be set higher than the inflation rate.
"We deem a 20-percent hike the most rational proposal," he told The Post.
Jakarta's minimum wage for 2005 is Rp 711,000 per month.
He emphasized that this year alone, workers had to experience two increases in fuel prices. The first was on March 1 by an average of 29 percent, and the second on Oct. 1 by an average of 126.6 percent.
A tripartite team comprising representatives from APINDO, labors unions and the Jakarta Manpower Agency was sitting at the negotiation table on Friday to discuss the planned increase in the minimum wage.
"We are expected to reach the final decision on the proposed provincial minimum wage by the end of this month. The proposed wage that is agreed upon by all concerned parties will be submitted to Jakarta governor (Sutiyoso) for approval," said Jakarta Manpower Agency head Ali Zubeir.
Ali said that his agency would give a two-month period for ailing companies to ask for an exemption from the obligation to apply the new minimum wage before it takes effect on Jan. 1, 2006.
For the exemption, he said, small enterprises would be asked to show their past two year's balance sheets, while large companies would face audits from the agency at their expense.
"The most important thing is that employers should be transparent in explaining their financial status to their workers to avoid misunderstanding, especially when the companies are in the doldrums," he said.