Wage talks heat up, but going nowhere
Wage talks heat up, but going nowhere
Damar Harsanto, The Jakarta Post, Jakarta
The negotiating between representatives of employers and workers
over the city's 2006 minimum wage is getting tougher, with both
parties sticking by their demands.
"Hopefully, we can reach a win-win consensus before the end of
this month. Otherwise, we will extend the deadline for a couple
of days," City Manpower Agency head Ali Zubeir told The Jakarta
Post on Wednesday.
Ali acknowledged that the minimum wage demanded by workers was
much higher than the one proposed by employers.
"Our position is to mediate. We have to ensure that the final
decision will not be detrimental to either side," he said.
Jakarta workers said over the weekend that they wanted the
minimum wage to be raised from the current Rp 711,834 to some Rp
1,203,015 next year, while the employers have reportedly agreed
to increase the minimum wage to just Rp 725,000.
"I find it hard to understand why the employers'
representatives insist on raising the minimum wage to Rp
725,000," Wajis Mangkona, a workers' representative in the
tripartite group told the Post.
He doubted the employers' statement that any wage increase
would deal a severe blow to ailing enterprises, which also must
cope with the recent increase in fuel prices.
"In reality, the employers will not suffer the bite of the
fuel price hike since they have already raised the prices of
products to weather the ballooning costs. It is the consumers who
are shouldering the higher costs, not the employers. That's why I
think their argument makes no sense," he said.
Labor unions in Jakarta demanded an increase of the minimum
wage to Rp 1,203,015 over the weekend.
He said that the amount was calculated by taking into account
the inflation rate of 4.7 percent from July to December last year
and 6.4 percent from January to September this year.
"I've never heard of a situation where paying higher salaries
to workers would make companies bankrupt," Wajis asserted.
Employer representatives in the negotiations were not
available for comment on Wednesday, but the Jakarta chapter of
the Indonesian Employers Association (Apindo DKI) secretary
general Masrana said earlier that firms here would find it
difficult to meet the demand of the unions, because most of
companies are still struggling to weather the severe blow
following the government's policy to raise fuel prices.
He said that the recent fuel price increase had made the cost
of production at some companies, especially the manufacturing
industry, to soar by up to 15 percent.
The government has raised the price of premium gasoline for
industry to Rp 6,290 per liter, a 21.8 percent increase from Rp
5,160 previously. Diesel fuel rose by 12.14 percent from Rp 5,300
to Rp 6,000, while kerosene was up by 14.28 percent from Rp 5,600
to Rp 6,400.
"We can only tolerate an increase of less than 10 percent at
the most," he explained.
Similarly, the Association of Indonesian Retailers chairman
Handaka Santosa called on the workers to also think about the
continuation of the business that they work at.
"The most important thing is how to have a balanced decision
(on the minimum wage)," Handaka said.
He added that the fuel price hikes also led to the lower
purchasing power of the people.
When the purchasing power low, companies have to cope with
lower sales, in addition to swelling production costs.
"So because of those factors, the workers will also be
affected. How can we pay their salaries if we are not selling our
products," he argued.
The new minimum wage, if an agreement is reached, is scheduled
to take effect on Jan. 1, 2006.
The city administration will give ailing companies a two-month
period to formally request a suspension from the obligation to
abide by the new minimum wage.