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.