Wage hikes too small, unions say

Wage hikes too small, unions say

By Maria Andi

JAKARTA (JP): Workers' unions and businessmen are divided
about the government plan to increase the minimum wage, which
will take effect on April 1.

The Federation of the All Indonesia Workers Union said
yesterday that the 10.63 percent increase in the minimum wage is
still far off workers' demands, and not enough to meet their
material needs.

The head of the Quality, Productivity and Wage Affairs
Division of the federation Wilhelmus Bhoka told The Jakarta Post
yesterday "We are disappointed with the increase because we had
proposed a 15 to 16 percent raise."

Minister of Manpower Abdul Latief said on Tuesday that the
amount is the most his ministry could ask for, given the present
gloomy economic prospects.

According to Bhoka, who is also member of the Council of the
National Research on Wage Affairs, the increase should be based
on the inflation of basic necessities, not on the general
inflation rate of all items recorded by the Central Bureau of
Statistics.

Subsistence components, he said, cover 39 basic needs which
include food and shelter while those registered by the bureau
comprise 100 items including luxurious goods, which are far
beyond the workers' reach.

"In the subsistence components inflation reaches 10 percent
annually," he said.

With its proposal for 15 to 16 percent raise, the union
expects the minimum wage to meet the workers' subsistence level
by 1997.

The newly-announced increase will only push wages up to 92.45
percent of this level.

Meanwhile the Indonesian Prosperous Workers' Union (SBSI) has
also voiced disappointment over the increase.

Mochtar Pakpahan, leader of the union, which is not recognized
by the authorities, yesterday welcomed the government's decision
but said the amount is unrealistic.

"The increase in only enough to cover inflation," he pointed
out to the Post..

Therefore, he said, a reasonable salary for workers should be
Rp 7,000 ($3) per day, excluding tax.

Criticizing the government policy, the Indonesian Legal Aid
Foundation said in a statement yesterday that the increase was
only meant to put an end to workers' protests. The foundation
also urges the authorities to improve its supervision on private
companies because they have a tendency to violate workers'
rights, such as the right to a minimum wage.

"The fine for those who are found guilty of denying workers
their rights should be increased from Rp 100,000 to Rp 50
million," the foundation said.

The Indonesian Employers Association, Suratno Hadisuwito, has
said earlier that the government's policy is in the interest of
entrepreneurs because last year many of them had to postpone the
implementation of wage increase instruction.

However, Bhoka said among 100,000 companies throughout the
country last year only 50 had postponed it.

"These are clearly poorly managed companies," he said.

According to Suratno, the increase does not simply raise the
workers' minimum salary but also increases the salary of senior
workers proportionally.

Last year's data shows that many workers, who went on strike,
also demanded proportional wage increases based on their length
of employment.

The deputy head of the Indonesian Chamber of Commerce and
Industry, Iman Taufik, said on Tuesday that the increase
percentage is reasonable and in accordance with its proposal.

The chamber had proposed a salary increase of not more than 15
percent, he said.