Union leader seeks 15% hike in minimum wage

Union leader seeks 15% hike in minimum wage

JAKARTA (JP): A senior union leader is making a fresh call for
the government to raise minimum wage levels across the country by
an average of 15 percent next year.

Bomer Pasaribu, chairman of the Federation of the All-
Indonesia Workers Union, said yesterday that despite theories to
the contrary, the productivity level of Indonesian workers has
increased unaccompanied by wage increase.

"Here, productivity has increased but wages have decreased,"
he said after a meeting with a visiting delegation from the
Australian College of Defense and Strategic Studies led by
Admiral (ret) Ray Funnel.

Taking workers' productivity levels into account, Indonesia
pays the second lowest wages among ASEAN countries. Vietnamese
workers are paid lower, but their productivity level is lower
than Indonesian's.

The call for a 15 percent raise was first made several months
ago by Wilhelmus Bokha, Pasaribu's deputy chairman, who said the
15 percent increase would bring minimum wage levels in most
regions to the minimum subsistence level, taking into account
this year's inflation.

The union argued that the average official minimum wage is
still only 92.5 percent of the minimum physical requirement,
which is calculated on the basis of the minimum calorie intake
required for a worker's subsistence.

The government usually sets the new minimum wage levels for
all 27 provinces in Indonesia after consultation with
representative employers and workers. The increases are announced
in December or January, and come into force in April.

The minimum wage level in Jakarta is currently Rp 5,200
(US$2.25).

The government has a mandate, under the Guidelines of State
Policies drawn up in 1993, to bring the minimum wage levels up to
the minimum physical requirement by 1998 at the latest.

The minimum wage increases have been fewer in recent years
amid increasing warnings from employers that too-rapid increases
could render firms less competitive against foreign companies and
put them out of business altogether.

This year, salaries rose by an average of 10.63 percent,
compared to 18.65 percent in 1995, 30 percent in 1994 and 17.7 in
1993.

As for the visit of the Australian College of Defense and
Strategic Studies, Pasaribu said the Australian government sees
Indonesia as a booming economy and has the potential to grow into
one of the world's main economic forces in another ten years.
(05)