Wage research council needs more 'teeth'

Wage research council needs more 'teeth'

JAKARTA (JP): The National Wage Research Council (DPPN) says
it should be given more power to formulate as well as enforce its
recommendations.

DPPN Chairman A.S. Ruky told a seminar on the wage system this
past Friday that the council's role should be expanded beyond
simply that of a government think-tank to also anticipate
problems in connection with wages as well as formulate policy.

The council, which was established in 1969 by presidential
decree, should be allowed to function as more than a research
center, Ruky said.

"By making DPPN a wage council, for example, it could have
more room to formulate a national wage system, control its
implementation and formulate wage scales for companies," he said.
"The body could also set sectoral and national minimum wages,
making it an independent and autonomous body."

The council now consists of 31 members comprising
representatives from employers, the All Indonesian Workers Union
(SPSI), universities and the government.

Ruky, who is an executive of PT Semen Cibinong, a private
cement producer, acknowledged that many council members have been
inactive. "Only 10 members, including two from SPSI, are actively
involved."

Ruky said that the main challenges facing the council include
raising wage levels in Indonesia, speeding up wage increases for
those at the bottom of the wage scales, and narrowing the gap
between the highest and lowest paid workers in a company, noting
that in some companies, this ratio reaches 50:1.

Ruky pointed out that over the years "things had gone wrong"
with the way the council dispensed with its duties.

The position of DPPN chairman had been downgraded. It was
originally held by the Ministry of Manpower before being
delegated to a director general. "And now it is handed to me -- a
person completely unattached to the ministry."

Matthias Aroef, a panelist from the National Productivity
Council of the Ministry of Labor, said DPPN should be
independent, and its members more professional. "It doesn't even
have a budget for research so the members practically work on a
volunteer basis."

Matthias pointed out that DPPN's current structural formation
gives it very little access to policy-makers. "It would be better
if the council was chaired by the minister. This way, it would
have quick access to the high-level policy-makers."

Comparison

As a comparison, David Chew from the National University of
Singapore, explained that the Singapore National Wage Council is
comprised of government officials and institution leaders from
the highest levels, including the ministers of labor and finance
and trade union leaders. Thus the body has direct access to
policy-makers and the head of the state.

The seminar, which was held jointly by the Ministry of Labor,
DPPN and the Center for Information and Development Studies was
the third in a seven-part conference to examine the overall
manpower situation in Indonesia.

Setting a minimum wage level has lately become a hotly debated
issue as company managers often disagree about what that level
should be.

Soeharsono Sagir, an economist from Padjadjaran University in
Bandung and a former aide to the Minister of Manpower, commented
during the seminar that "the official regional minimum wage
currently implemented throughout the country is irrational and
without a clear scientific basis."

He suspected that this has occurred because the government
failed to carry out sufficient research before imposing the new
minimum wage levels. "Instead they only listened to unreliable
information from local labor councils."

Soeharsono reminded that according to the regulations, the new
daily wages in Jakarta, for example, became Rp 3,800 (US$1.80)
and in Kalimantan, Rp 3,250.

"This is irrational, because the daily cost of living in
Kalimantan, Rp 4,248 for an unmarried worker, is far higher than
that in Jakarta, which is Rp 3,856," he sited. (pwn)