Union calls for hike in minimum wages

Union calls for hike in minimum wages

JAKARTA (JP): The Federation of the All-Indonesia Workers
Unions urged the government yesterday to increase the official
minimum wage by 20 percent across the board.

The country's only officially recognized labor organization
effectively withdrew its earlier support for the government's
ruling to postpone any increase in minimum wages pending a
resolution of the economic crisis.

Federation chairman Datuk Bagindo said the about-face was made
during a plenary meeting of the leaders of the federation and the
13 industrial sectors' unions in Jakarta last week.

Bagindo came under severe criticism from fellow union
executives last month for endorsing a decree by Minister of
Manpower Theo L. Sambuaga which froze the official minimum wages
at current levels indefinitely.

Minimum wages are traditionally increased on April 1.

Tripartite talks on the issue involving the government,
federation representatives and employers became stalled as the
economy plunged deeper into crisis, until Theo issued the ruling
last month.

Bagindo said the federation was now sticking to its earlier
demand that minimum wages be raised by at least 20 percent.

He said the many companies which could afford to pay higher
minimum wages should be forced to do so.

Those firms that could not meet the target because of
financial difficulties could be exempted, as permitted by the
rules on minimum wages, he said.

He noted that several industries had voluntarily raised the
wages of their workers in spite of the government's freeze.

Wages in the plantation sector have been increased 16 percent,
in the textile sector between 16 percent and 20 percent, in the
cigarette, tobacco, beverage and food sector between 13 percent
and 18 percent and in the electronics sector by 40 percent, he
said.

Wages were not the main problem for most companies currently
in trouble, he said. "Companies are laying off workers not
because they cannot pay their workers' wages, but because they
cannot afford to pay for imported raw materials."

Inflation

The increase in minimum wages was necessary in view of the
soaring rate of inflation, he said.

The government has estimated that inflation will reach up to
50 percent in the 1998 calendar year, up from 17 percent in 1997.
Without any salary increases this year, the real value of the
minimum wages would effectively decline 67 percent.

The union's changed stance comes amid unconfirmed reports that
the government is about to award a 15 percent salary increase to
civil servants.

The monthly minimum wage for Jakarta is currently set at Rp
172,000 (US$23) per month. Batam has the highest monthly minimum
wage, Rp 220,500, and Yogyakarta the lowest, Rp 106,500.

Responding to the appeal, the Ministry of Manpower said the
decision to freeze minimum wage increases would not be reversed.

Secretary-General Soewarto said the government would not
review or lift the decree for the present because it was made
after an objective evaluation of the economic situation.

He said, however, the decree did stipulate that the decision
would be reviewed when the economy began to recover. (rms)