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)