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.